1920-05-19

REPARATION BY GERMANY-ALLIES CONFERENCE AT OSTEND.

[Stage Direction]
On the Orders of the Day:
Mr. P R. DuTREMBLAY (Laurier-Outre-mont): I see in the Montreal Gazette of this morning a despatch stating that it is rumoured that, following the conference held at Hythe, the Government of Germany will be called upon to pay to the Allies as an indemnity the sum of about £6,000,000,000. Would the Government tell us what portion of this sum is to be allocated to Canada?
Mr. SPEAKER:: I would ask the hon.
member to put that question on the Order Paper. It is one which requires notice and with respect to which there is no urgency.
Mr. DuTREMBLAY:	It is a question
which requires the attention of the Government. The despatch further states that a special conference of the Allies will be held shortly at Ostend to consider financial questions among the Allies. I should like to know if the Government have been invited to attend this conference and if they will have a representative at it.
Rt, Hon. Sir ROBERT BORDEN (Prime Minister): The answer to my hon. friend'* question is in the affirmative.



THE BUDGET.


[Stage Direction]
Hon. iSir HENRY DRAYTON (Minister of Finance) moved:
That the Speaker do now leave the Chair for the House to go into Committee of Ways and Means.
He said: Mr. Speaker, I am afraid that on the present occasion I shall have to ask the indulgence of the House as I shall have to address the House at considerable length. The fault is not mine; the financial position of the country at the present requires, I think, to be dealt with in considerable detail.
The conditions not only in Canada to-day, but the world conditions obtaining, are very different from the conditions which did obtain while the war was in progress. During this period the compelling necessity of the moment, the winning of the war, required raising large sums of money in the easiest possible way and with the least infMr. Fielding.]
terference with the public or with business methods. It was absolutely imperative that there should be no check in production, no questions raised which might hinder that production or hinder the war effort. It was no time for the consideration of domestic politics, which in any way might distract the nation from a united effort towards the supreme end.
These conditions to-day are changed; the war is won; expenses are great; the cost of Government operations as well as the carrying on of every business of every character in the country has increased enormously, and over and above this the country, with other countries which took their part in the titanic struggle, is faced with a pyramid of debt. The task to-day is to aid the return to ordinary economic conditions to the extent that such return is at this time possible.
The duty to-day is not only to carry on the Government of the country without any additions to the debt, but on the other hand to promote measures which will reduce the nation's obligations. The task while heavy is nevertheless not as severe and difficult as the obstacles and difficulties wh'ch the country has gloriously overcome in the five years of war and stress. Indeed, were it possible for the country to again become as united and earnest as it was during the war period, if it were possible for each and all of us to sink all differences, class and sectional interests and jealousies into an effort towards re-establishing Canada las united and co-ordinated as that which won the war, the task would indeed be easy and simple.
Canada's soldiers during that period won .for themselves and our country imperishable fame. " Their name liveth for evermore." But the productive efforts of Canada during that period were second only to their glorious record. For the five fiscal years ended on March 31, 1915, the excess of the country's imports over exports amounted to $825,521,490. For the next succeeding five years, ended on .March 31 last, this excess of imports was not only overtaken, but our exports exceeded our imports by a sum of $1,803,442,233. It is plain in view of such a tremendous productive and industrial exploit, that if anything like the same effort is made to overcome debts, and by overcoming debts to bring .about a proper deflation of prices, credits, and circulation, the task will prove well within our powers. Canada's trade while, as in the ease of all countries, subject >to periodical depression has steadily advanced, as the following figures will show:

Fiscal Year.	Total Trade.
1879		 $ 149,489,188
1889		,	.	..	196,309,107
1899		 304,227,339
1909		 548,139,881
1919		 2,185,194,620
1920	(unrevlsed)	. .	..	2,351,174,886
The increase thus recorded is one which is contributed to practically by all of our productive agencies and is spread over a .wide field. An increase in the basic industry of agriculture may be illustrated by the country's wheat production which has been as follows:
Year.	Bushels.
1870	 16,732,873
1880		 32,350,269
1890		 42,232,372
1900		 55,572,368
1910		 132,077,547
1919	 193,260,400
As indicating the development which has taken place in the production of our agriculture, forests, mines, and fisheries, and the growth of our manufacturing establishments, I desire to place on record the following statistics:
Agriculture Production-Canada.
Other
Total
Year.	Field Crops.	Farm Produce.	Production.1900.. .	$ 194,953,420	$169,953,446	$ 364,906,8661910.. ,	279,982,334	663,349,1901917.. ,	
1,14 i,637,000	476,391,000	1,621,028,0001919.. .	
1,452,437,000	523,404,000	1,975,841,000Forest	Production-Canada.	Year.	Log Products	1917	Year.	and Wood Pulp.	1918	
211,301,8971881 . . . .	
$ 39,540,570	1919	
173,075,913*
1901
1911
1919
	 55,266,368
	 55,051,865
	 72,878,051
	 114,713,655
	 79,767,938
	 140,381,584
Mineral Production-Canada.
Year.
1889	 $ 14,013,113
1899	 49,234,005
1909	 91,831,441
Subject to revision.
Fishery Production-Canada. Fiscal Year.
1879	 $13,529,254
1899
1917*
1918*
17,655,254
21,891,706
29,629,169
52,312,044
60,243,429
Calendar year.
Manufacturing Industries.
Year.	Capital Invested. Employees. Value of Products.
1881	$ 165,302,623	254,935	$ 309,676,0681891	
353,214,300	369,595	469,847,8861901	
446,916,487	308,482	481,053,3751906	
846,585,023	356,034	718,352,6031911	
1,247,583,609	515,203	1,165,975,6391915	
1,994,103,272	514,883	1,407,137,1401917	
2,786,649,727	692,067	3,015,577,940
Co-related with the above are certain financial statistics which are interesting.
Canadian Chartered Banks.
Amount of Fire Insurance
Paid-Up Capital
Year.	and Reserve.
1888	 $ 79,218,565
1898	 91,197,340
1908	 170,885,203
1918		 225,508,222
1919		 243,912,111
Total Bank Deposits by Year.	the Public in Canada.
1878	 $	71,900,195
1888	 128,725,529
1898	 248,572,085
1908	 639,899,365
1918		 1,669,597,617
1919		 1,841,478,895
Policies in Force.
Amount.
[Stage Direction]
Amount of Life Insurance Policies in Force.
Year
Dec. 31.	Amount.
1878	 $	84,751,937
1,888	 211,761,583
1898	 368,523,985
1908	 719,513,913
1918		 1,785,061,273
1919	(unrevised) .. ..	2,187,833,396
Year Dec. 31.
1878	
1888	
1898	
1908	
1918		
1919	(unrevised) .. ..
[Stage Direction]
If the progress of the past be but a fair indication of the future, the problems of to-day and to-morrow may be faced without doubt of a successful issue.
During the period covered by the above statistics an immense railway system has been built. In 1879 the mileage of steam railways in Canada was 6,484, and in 1919, 38,896.
Steam Railways of Canada.
1879.	1889.	1899.	1909.	1919.Miles in operation .	
6.4S4	12,628	17,141	24,104	38,896Tons of freight	
8,348,310	17,928,626	31,211,753	66,842,258	116,699,572Gross earnings	$19,925,066	42,149,615	62,243,784	145,056,336	382,976,901
A great canal system has also been constructed from bide water to the head of the Lakes at a capital cost of $110,823,237.42 to the country. Large and commodious public buildings have also been erected, with the result that an investment has been made in Government capital accounts of $766,912,802.71, while the Dominion ledger shows .Government investments amounting to $1,078,537,461.27.
National Debt.
The ledger as of March 31, 1920, shows the country's gross debt to be $3,014,483,774.12.- The capital accounts referred to are not deducted from this debt but the ledger, treating investments as active, deducts them from the gross debt and discloses a net debt of $1,935,946,312.85. Beyond all question it is a matter of importance that the exact position of the country's debt should be clear. While the books are correctly kept and the entries properly made, in my opinion some of the investments cannot be characterized as active investments. They aire shown as follows:
Investments, etc., included in
calculating Net Debt. As of March 31,1920
Sinking Funds	$	21,385,930.72
Canadian Northern Railway Co. 140,223,373.89 Grand Trunk Pacific Railway
Co	 95,345,469.19
Grand Trunk Railway Co		1,148,533.33
Loans to Banks	 101,065,725.00
Advances to Trust & Loan Cos.	3,850,000.00
Loans to Provinces (Housing)	11,740,000.00
Loans to Provinces (Farmers)	3,500,000.00
Imperial Government	 171,710,168.19
Other Governments	 34,336,117.75
Miscellaneous Investments. ..	39,314,000.45
Miscellaneous & Banking Acc'ts	175,039,622.61
Cash	 173,984,342.34
Specie Reserve	 103,597,849.90
Province Accounts	 2,296,327.90
[Stage Direction]
Gross Debt	 $3,014,483,774.12
Less above	 1,078,537,461.27
Net Debt	 $1,935,946,312.85
It is obvious that the advances to the Canadian Northern, Grand Trunk Pacific, and Grand Trunk Railway Companies can-
LSir Henry Drayton.]
not be treated as active assets. They are not at the moment realizable; further, no interest is being paid, and in some eases the principal as well as interest is overdue. As is well known, Canada is now the owner of the Canadian Northern, receiver for the Grand Trunk Pacific, and steps have been taken for the acquisition of the Grand Trunk. While the railways have potential value, at the present time the fact is that the country itself owns the Canadian Northern and is responsible for the operation of the Grand Trunk Pacific, with resultant heavy cost to the taxpayer.
Assets which are not readily convertible, as the specie reserve is, or are not interest producing, are not such assets as ought to be deducted from the gross debt. They are inactive, they are items of such a character as might well be placed in a suspense account. At any rate, whatever may be their future value, however great it may be, they are not assets of such a character as to directly reduce the gross debt any more than the other capital accounts of the country ought to be deducted from it.
I would therefore reduce the deductions made from the gross debt by the railway items already referred to, and on the same grounds after making a study of the amounts making up the $39,000,0190 odd Charged to miscellaneous investments, I would reduce that item by $11,015,951.20, and the item, miscellaneous and banking accounts, of $175,000,000 odd by the sum of $56,592,463.12. -While the charge against the Imperial Government is correctly stated as of the above date, beyond all question there are further contra accounts of the Imperial Government which will approximately reduce this credit item by some $33,033,333.34. The result of providing for this contra account and of treating the inactive items as items that ought to go in suspense or capital account is to reduce the investments included in calculating the net debt by $337,359,124.07, and to increase the net debt as shown from $1,935,946,312.85 to $2,273,305,436.92.

Inflation.
There undoubtedly is in Canada as everywhere else inflation in the price of commodities, inflation in currency, and inflation in credits. Our total issue of Dominion notes on March 31, 1914, was $117,795,718. It reached a peak of $337,319,309 in November 1918 and on the 31st March last it amounted to $311,932,791. Of this amount $128,366,066 is issued against gold. The amount of gold required under the Dominion Notes Act, as amended, to secure an issue of this amount is $90,866,066. Gold to the extent of $100,286,280 is available. $26,000,000 of the remainder of the currency was issued for national purposes under the authority of the Dominion Notes Act 1915, and secured as therein provided. $50,000,000 was issued for the purpose of making advances to the Imperial Treasury and is secured by the pledge of approved securities, and $107,566,725 was issued to the banks secured by approved securities largely consisting of
Imperial Treasury Bills and our own Treasury Bills. As a result there has been an increase since March 31, 1914, in the circulation issued by the Dominion of $194,137,073.
The banks' circulation on 31st March, 1914, was $96,848,384. In November of the preceding year a high point of $126,839,620 was reached. On the 31st March last it amounted to $225,769,628. As against this increase, in the same period the holdings of the banks in cash reserves (gold and subsidiary coin) rose from $45,661,913 to $79,990,836, and the deposit of Dominion notes and gold in the Central Gold Reserves, earmarked for the redemption of the bank note circulation, rose from $3,500,000 to $108,-
200,000.	In addition, the bank holdings in Dominion notes for general reserve purposes rose from $96,227,321 to $184,152,673.
Tabulating for purposes of comparison the combined circulation of the country as of March 31st, 1914, and the 31et March last, the result is as follows:-
Dominion Note Circulation Bank Note Circulation. . .
March 31st, 1914.
[Stage Direction]
March 31st, 1920.
[Stage Direction]
Dess Dominion Notes held in Central Gold Reserves . ..	3,500v000
[Stage Direction]
Gold Held.
By Government	
By Banks	
In Central Gold Reserves.. .
[Stage Direction]
nil
[Stage Direction]
Per cent of Total Gold to Total Outstanding Circulation ..	67
[Stage Direction]
As the statement shows, the combined circulation of the country amounted on March 31st last to $440,002,420 as against $211,144,102 on March 31st, 1-914, a percentage increase of 108 per cent.
Comparing these increases with those of other countries, the Right Hon. Reginald McKenna recently stated that the circulation of Great Britain had increased 207 per cent between 1914 and the end of 1919, while the circulation of the United States, as given in the report of the Secretary of the Treasury, shows an increase of 70 per cent from June 30, 1914, to the -corresponding date in 1919. The circulation of other countries taking a prominent part in the war has increased to far greater percentages.
Unquestionably, the currency in light of former gold reserves is inflated. The fact, however, is that the world over currency to
an ever-increasing degree is related to movement of commodities, secured by a national guarantee supported by approved securities. This trend was apparent before the war. The best illustration is perhaps afforded by the Federal Reserve legislation of the United States. Under that legislation, currency issued by Federal Reserve Banks requires a gold reserve of 40 per cent and no currency stands higher.
Under all the circumstances, bearing in mind that Canada before the war had to borrow abroad to finance her own requirements, hearing in mind that during the war and since the Armistice she has not only financed herself but has- also extended credits to other nations, the situation of the country's currency is very remarkably good. The percentage of the gold reserves to the Dominion and bank note circulation is 43 per cent. The percentage of gold to
[Stage Direction]
the total circulation of Great Britain based on 1919 figures is 26 per cent and of the United States approximately 55 per cent.
; The circulation, large as it is, is all required. The greatest demand that actual circulation has to meet is the pay-envelope. In view of to-day's conditions the world over on a greatly increased wage scale, much more circulation is now required for this purpose. The increased prices of commodities mean that more money must be kept in the tens of thousands of shop-tills all over the country. The constantly increasing demands on the Mint tell their own story. In 1914, 11,770,108 pieces of coinage were turned' out; in 1919, 35,906,003 pieces, and for last march,, 2,677,874 pieces were coined, as against 806,646 pieces in March, 1914.
Increased credits have contributed and contributed largely in the first instance to the abnormal increase in the cost of commodities, and to a lesser extent increased circulation contributed to the same result. The cost of commodities under new high standards once having been arrived at, however, if business is to continue in Canada under existing world conditions, both the inflated currencies and inflated credits are at the moment necessary to support it. The high prices in Canada could not be and were not made by Canadian action alone. They are the result of the general trend in the prices of commodities the world over, and to-day were it possible to suddenly deflate Canadian credits and circulation, with the general demand for commodities that to-day exists, the influence on the general situation would be negligible. Prices would continue high and the only_ result to the Canadian public consequent on the withdrawal of purchasing power would he stagnation of business, unemployment, and loss of production.
As stated, inflation of credit has more to do with increased buying power and therefore, with that increased buying power, has more to do with affecting the cost of commodities than circulation. It is true that in part these credits are increased by an inflated circulation, but the circulation deposited in banks from time to time plays but a small part of the total deposits. Every credit transaction, every advance made by a bank to a customer inevitably produces a corresponding deposit in the hanks of that customer's creditor or creditors. The net result is to increase bank deposits by the extent of the credit and to increase the liabilities of the hank granting the credit without any corresponding

increase in its cash assets. Obviously, if the money advanced is to be applied in a productive agency which would be carried on with a profit and result in a large gain of commodities to the country, there is no inflation. On the other hand, the business situation has been improved.
The credit basis which is more vicious than any other basis is that which is given for Government expenditure on non-productive objects and which does not result in any addition to the national production. Every loan for an unproductive purpose that the Government makes, no matter how successful it be, to some extent at any rate increases the credit inflation of the country. It either does it directly, as in cases where money is loaned to loan subscribers by the banks for the purpose of enabling them to take up the Government's securities, or indirectly by taking away from the productive agencies of the country savings which otherwise would be available for them, rendering it necessary for the banks to enlarge credits for essential purposes of production which otherwise would have been met by the savings of the nation. Government borrowing, in other words, has the effect of removing capital, the tool of industry, from its ordinary and legitimate purpose of industry and production. It ought to be noted that in Canada the loan situation is extremely satisfactory. Not only has the great bulk of our loans been subscribed to by our own people but in connection with all our large popular issues not one single bond has been subscribed to by the banks. Canadian banks are not loaded with governmental securities.
The increase in bank deposits which has been brought about in Canada is in a very similar ratio to that which has happened in other countries. Our total deposits on 31st March, 1914, amounted to $991,734,246, and on the 31st March last amounted to $1,855,131,598, an increase of 87 per cent. In England, according to Rt. Hon. Mr. McKenna, bank deposits increased 115 per cent from 1914 to 1919, while in the United States an increase of 80 per cent in total deposits occurred between 1914 and 1919.
In Canada it may be noted that the Government's war borrowings amounted in round numbers to $2,000,000,000 as against an increase in deposits amounting to $863,397,352. As a result, the increase in pub lie purchasing power gauged by the total currency in circulation and total hank deposits in Canada increased 91 per cent in 1919 over the figures of 1914. In England

the increase was 125 per cent and in United States 78 per cent.
The commerce of the country still requires ample credits. On the 31st March, 1914, the total of loans made by the Canadian banks amounted to $928,184,060, and on the 31st March last the loans amounted to $1,527,078,232, an increase of 65 per cent, This large sum does not include any advance to the Government. Although the business men of the country and those requiring accommodation are now enjoying this great increase in credits, the fact is that from available resources the banks in Canada as well as in all other countries ought not to meet the full requests made for further credits, apart entirely from the injurious effect credits still further increased would have on the general economic situation.
The situation is therefore one in which it is impossible by any direct Government action to bring about deflation either in circulation or in credits without great danger of economic disaster. Inflation can only safely be cured in this as in other countries, by the Government and Provincial Governments stopping further loans, and by all governmental institutions, including municipalities and indeed every individual whose circumstances permit it, reducing expenditure whenever possible and by an increased production in all our forms of productive industry.
While the trade figures of the country show advances in the value of our production and exports, and while these figures correctly show our standing and growth as compared with those of _ other nations, the fact must not be lost sight of that these figures are based on the inflated values today obtaining and that expressed in quantities the production of the country instead of increasing has actually decreased. Without wearying the House with statistics, it is sufficient to merely point to the best indicator of trade activities, that is, the amount of tonnage handled by the country's railroad system.
Those statistics show that in 1918 our railways handled 127,543,687 tons of freight. This indicates a remarkable activity particularly in view of the fact that many of the country's best workers were overseas and that relatively a very large proportion of our population was withdrawn from agriculture and industry. It is specially significant in view of the fact that in the year 1914, with our men at home, the freight handled only amounted to 101,393,989. tons. The tonnage handled last year, however, only amounted to 116,699,572 tons. Instead of decreasing our production the
imperative necessities of the country required that it should be largely increased, not only to assist in financing and carrying on the country's operations but also to assist in 'bringing about that reduction of the present high cost of living which is so much desired.
Trade.
I have already referred to the aggregate trade for the past year and the favourable balance that has developed over the past five years. The results of the past year require a greater detail. Canada's external trade in 1919-20 resulted in a favourable balance of $220,000,000. The chaotic condition of foreign exchange during the year was not without its influence on our business abroad and tended to complicate the readjustment of international trade. In the United Kingdom-our largest selling market-the Canadian dollar was at a premium ranging from 1 to 22 per cent, while in the United States, where some 75 per cent of the national purchases are made, our dollar has been at a discount of from 2f per cent to 17J per cent.
The rate of exchange thus worked against Canada in her chief selling market as well as in her chief purchasing market. An appreciated currency assists national buying in any market, in which it is at a premium, while purchases are made proportionately the more onerous when made in a market where the currency is at a discount.
Our total imports from United Kingdom amounted to $126,274,000, which is $53,000,000 greater than in 1919 and very nearly, as expressed in dollars, equalled our pre-war trade with the Mother Country. Her purchases from us totalled $489,000,000, a decrease of $51,000,000 from 1919, the balance of trade being $363,000,000 in Canada's favour. While our exports to Great Britain have fallen off, it should be noted that the 1919 figures included about $170,000,000 for munitions and war materials. To the extent of $120,000,000, therefore, this transient trade has been feplaced by trade of a more permanent character. The increase in imports from Great Britain has been very marked in recent months. They rose from a low point of $5,204,979 in April to $25,555,386 in March, the latter figure constituting not only a record but an extraordinary increase. Figures for the last six months have been as follows:-
October	$ 8,655,848
November	10,919,282
December	 9,888,075
[Stage Direction]
January	16,414,503
February	 ,. .. 14,953,730
March	 25,555,386
The increase in imports from the Mother Country is very gratifying and is very significant. The greatest previous volume of her monthly exports to Canada prior to the war was $14,395,740 in March, 1913. It is to be noted that the good old Mother Country very nearly doubled March last, the greatest amount of exports she has ever sent to this country.
Exports to the United States amounted to $464,000,000, increasing by $9,000,000, while imports from that country reached the unprecedented figure of $802,000,000 exceeding 1919 imports by $55,000,000. The year's trading, therefore, resulted in an unfavour. able trade balance of $338,000,000. The volume of imports from the United States is all the more remarkable owing to the fact that for a considerable period of the year the adverse exchange rate which has
obtained has added to the extent of the depreciation of our money in New York an additional cost to the Canadian purchaser. It is apparent that the mere question of cost has not weighed very much upon the Canadian buyer. Undoubtedly, the exchange rate is against the interests of our national buying from the United States. If practicable it ought to be remedied but it cannot be properly remedied by any artificial means. It will be remedied and can only be permanently relieved when sterling advances to its normal position and Canada's interchange of commodities with United States is reduced to a more reasonable ratio.
The following compilations indicate the trend of our trade both as to imports, exports, and total trade: (1) with all countries; (2) with the United Kingdom; and (3) with the United States, for the last three years and for the pre-war years of 1913 and 1914:-
	Canadian Trade-Merchandise Only.		
Imports for Consumption.	Exports Domestic and Foreign.	Total Trade.Fiscal Year ended March 31st- 1913	$ 670,089,066 618,457,144 962,543,746 916,429,335 1,064,516,177	$ 377,068,355 455,437,224 1,586,169,792 1,268,765,285 1,286,658,709	$ 1,047,157,421 1,073,894,368 2,548, 713,538 2,185,194,620 2,351,174,8861914	1918	1919	
Trade with United Kingdom.		
Imports for Consumption.	Exports Canadian Produce.	Total.Fiscal Year ended March 31st- 1913:	$ 138,741,736 132,070,362 81,302,403 73,035,118 126,274,365	$ 170,161,903 215,253,969 845,480,069 540,750,977 489,151,552	$ 308,903,639 247,324, 331 926,782,472 613,786,095 615,425,9171914	1918	1919	
Trade with the United States.		
Imports for Consumption.	Exports Canadian Produce.	Total.Fiscal Year ended March 31st- 1913	$ 435,770,081 395,565,328 791,906,125 746,920,654 802,095,452	$ 139,725,953 163,372,825 417,812,807 454,873,170 464,029,273	$ 575,496,034 558,938,153 1,209,718,932 1,201,793,824 1,266,124,7251914	1918	1919	
[Stage Direction]
The following: statement indicates the dislocation brought about by the war in our two chief markets. Great Britain and the United States.
(Expressed in percentages of the whole.)
	Pre-War. Post War.		
Year ended 31st Mar., 1914	Year ended 31st Mar., 1919	Year ended 31st Mar., 1920Canada's Purchases. From United Kingdom	21-35% 63-98% 48-81% 38-85%	7-96% SI-50% 44-20% 37-66%	11-86% 75-44% 38-54% 38-94%From United States	Canada's Sales. To United Kingdom	To United States	
Revenue, 1919-20.
The revenue for the fiscal year ended 31st March last will when the accounts are finally closed reach approximately $388,000,000. This is the largest revenue that the country has ever collected. Instead of lessened receipts, as conditions at the time the last Budget was prepared seemed to indicate, the revenue of the preceding year has been exceeded by $75,000,000, and the country's revenue for 1920 was no less than $255,000,000 greater than that of the first year of the war. The chief sources of revenue were as follows:
Customs	'	$169,000,000
Excise	 43,000,000
Post Office	 22,0*00,000
Business Profits	War Tax.. ..	44,000,000
Income Tax	 20,000,000
Other war taxation	 17,000,000
Expenditure, 1919-20.
The consolidated fund ordinary expenditure will be approximately $349,000,000. This sum of $349,000,000 includes $108,500,000 interest on public debt, $26,000,000 for pensions, and $49,000,000 for Soldiers' Reestablishment.
For investment and capital outlays, beyond the ordinary current expenditure of $349,000,000, an expenditure of $187,856,991 is estimated. The resultant total is $536,741,110 and represents the outlay of Canada for all purposes apart from war during the past year.
With a total revenue of $388,000,000 and an ordinary expenditure of $349,000,000, it will be seen, that during the fiscal year 1919-20 the Government, after meeting all ordinary expenditure, including an increased amount for interest account and pensions over the previous year totalling nearly $39,000,000, has a surplus of approximately $39,000,000 over ordinary ex-158
penditure, to apply to capital expenditure.
The demobilization expenditures for 1919-20 will amount to $350,000,000, making a total outlay for the year of $886,741,110. Our total expenditure for the war, up to and including the 31st March, 1920, now amounts to $1,674,000,000, apart altogether from such expenses resulting from the war, as Pensions, Soldiers' Civil Re-establishment, Soldiers' Land Settlement, and interest on war debt.
Debt.
During the year just passed the country paid off a floating debt of $247,000,000 out of the proceeds of the Victory Loan issue of 1919. The floating or short date indebtedness of the country at the close of the year amounted to only $88,956,000. The addition to the debt during the year amounted to $395,000,000 and the position of the net debt has already been referred to.
Expenditures for 1920-21.
The Main Estimates for 1920-21 total $537,149,428 and Supplementary Estimates for $12,500,000 for bonus purposes have been tabled, with the question of Main Supplementary Estimates still standing.
In the above-mentioned Estimates already brought down certain considerable amounts classified as investments are included as follow's:	[DOT]
Soldiers' Land Settlement Loans. .$50,000,000
Loans to Canadian Northern Railway
Company	 48,600,000
For Railway Equipment purposes.. 17,000,000 Loans to provinces for Better Housing*
purposes	 13,300,000
to which ought to be added $20,000,000 for shipbuilding programme included in the above Estimates as "Public Works (Marine Department), Capital."
[Stage Direction]


The estimated expenditure on ordinary account for the present year is: Main Estimates, $328,500,000 and Civil Service bonus, $12,500,000. Of this, $140,000,000 represents interest on public debt, an increase over 1919-20 of $31,500,000. An estimated expenditure on capital account of $41,000,000 is also included in the total of $549,649,428. There will be no separate Act providing for demobilization expenses this year. The Main Estimates contain provision for $38,463,400 for this purpose and also cover distributed items to the amount of $1,745,624 for services paid out of the demobilization appropriation last year. In order to compare the expenditure proposed for all purposes apart from the war with that of the past year the amount then of $40,209,024 must be deducted from this year's Estimates. As these Estimates are also enlarged by an unescapable increase of $31,-
500,000	in debt interest, it will be found that for comparable expenditures, notwithstanding increased costs of service, a saving of $71,709,024 is indicated.
Probable income for the present Fiscal Year, 1920-21.
The revenue for the year ending the 31st March, 1921, estimated on the basis of existing fiscal legislation, and assuming that values of importations for customs purposes remain practically the same as for 1919-20, should amount to $381,000,000 as follows:
Customs	
Excise	
Post Office	
Government railways for
months	
Business Profits War Tax.
Income Tax	
Other War Taxation	
All other revenues	
.$167,000,000 .	43,000,000
. 22,000,000 9
. 28,000,000 .	40,000,000
.	35,000,000
.	17,000,000
.	29,000,000
The revenue from the Government railways for 1919-20 is put at $42,500,000. For 1920-21 only $28,000,000 is taken into account on the assumption that at the end of this calendar year the revenue from Government railways will be under the control of the Canadian National Railways, and applied directly against the working expenses of such railways, which will be correspondingly reduced in our estimate of ordinary expenditures for the year.
Including the estimated revenue of $381,000,000, cash on hand and outstanding counts including balances due from Great Britain make a whole total of $720,441,752.88. In all probability the whole of these accounts will not he collected within the year and $571,000,000 will more accurately represent the actual cash resources for

the year. No further loan, as already pointed out, ought to be made. In addition to the commitments already mentioned, certain floating obligations mature during the year. They are as follows:
Treasury Bills, Oct. 1st, 1920.. $24,605,000 Treasury Bills, Oct. 15th, 1920.. 49,215,000 Debenture Stock, June 1st, 1920.	238,400
Total.. ..$74,058,400
The revenue of the year and cash assets available should at least not only carry current expenditure but retire this debt.
Grand Trunk Acquisition.
The current expenditure, however, will be greater this year than that already indicated. Deficits on the railway system have been reported in the Main Estimates. These deficits during the readjustment period will be materially increased by the acquisition of the Grand Trunk. The primary object of the acquisition of the Grand Trunk was to render efficient and properly complete the National system. The country had a large railway investment with proper terminal facilities in the West, but, speaking generally, lacking them in the East. The railway burden was also largely increased by the failure of the Grand Trunk Pacific promoted and owned by the Grand Trunk. The country was faced with the necessity either of providing new terminals at great cost in eastern centres, leading to a still greater railroad duplication, or of acquiring the Grand Trunk system. The traffic centres of the East had to be opened to the National system if that system was to be put upon a proper basis and enabled to properly compete in all through-traffic. Over and above this, the Grand Trunk was acquired for the purpose of reducing existing duplication and enabling extensive operating economies to be made.
Over and above these considerations, the acquisition of the Grand Trunk was highly desirable in order to prevent the insolvency of the line and the consequent breakdown of railroad facilities in the districts served by that system. Railway receiverships in some instances do not carry with them serious consequences, but in the case of the Grand Trunk a receivership would be exceedingly objectionable owing to the fact that the company's system is composed^ of many separate railway corporations having in instances separate obligations and different creditors, rendering a re-organization as of a completed system very difficult. Such re-organization would be attended with still

greater difficulty owing to the fact that part of it would take place under the direction of United States courts and part under the direction of Canadian courts. The dislocation of business would have been exceedingly great and the inconvenience and loss to Canadian shippers and consignees and to Canadian business heavy.
Some economies ought to be effected in the near future, but with the arbitration pending it is improbable that full benefit of the Grand Trunk acquisition can be expected in the current year. It will be necessary to make advances to the company to cover past due operating obligations. These advances will constitute obligations of the company and as such must be taken into account in the arbitration. In addition to this, advances of necessity will be made to provide for this year's operations, including the acquisition of necessary rolling stock.
The abstract of the company's cash book as of February 21 last shows obligations overdue or shortly payable amounting to $18,710,588, made up in large part of unpaid vouchers, bank overdrafts, drafts held for acceptance and short date notes given for supplies. As against these debts the Grand Trunk has supplies on hand and certain capital accounts as against which no capital issue has been made. They are, however, not of a character which can be relied upon for the purpose of supplying cash to meet these liabilities.
The approximate amount to cover advances for the purposes above mentioned is $28,000,000.
Railway difficulties and overdrafts ought now to be at their peak. Proper co-ordination and economies will, just as soon as the Grand Trunk arbitration is over, be practicable and will be put into effect. The balance sheet, however, inevitably depends on the cost of carrying on business, which has been very greatly increased, and the general rate schedule. The serious drain made by the railways on the country's finances ought to be materially lessened.
As a matter of common justice to Canada it should be stated that the charges of unfairness levied against Canada by different shareholders at Grand Trunk meetings, are unfounded. The simple fact remains that if the Grand Trunk had not been taken over the shareholders in all human probability would have lost their whole investment. It is entirely untrue that the Government forced the company to pay a highly increased wage scale and at the same time 158i
prevented it from raising its rates either directly or through the Board of Railway Commissioners. The chairman of the Grand Trunk is reported to have made the following statements at the special general meeting of the company:
I knew there were influential men in Canada who thought the policy the Government should pursue was to let us alone, and that the weaker we became the easier we could be dealt with - (hear, hear)-they knew we were being forced by the Government to carry on under impossible conditions-conditions over which we had absolutely no control. What were those conditions? That we should meet every order issued by the Canadian Railway War Board to increase wages by immediate compliance, notwithstanding that no increase of rates to meet the increased expenses was allowed	
In 1918 an increase of freight rates was granted on a great portion of the freight carried, something under 15 per cent in March and something under 25 per cent in August. Notwithstanding this, owing to a further serious increase of wages being ordered by the Canadian Railway War Board, without any corresponding increase in rates, there was an actual decrease in net profit for 1918. The gross traffic for 1918 amounted to £12,600,000, as compared with £9,800,050 in 1917, or a gross increase of £2,700,000, but the working expenses increased by £2,900,000, or a net loss of £200,000 for 1918.
In 1919, the accounts of which are not yet complete, the gross earnings are estimated at £14,000,000, as against £12,600,000 in 1918, or an increase of £1,400,000. Owing, however, to another large increase in wages being ordered by the Canadian Railway War Board-again without any increase in rates-it is not expected there will be any increase in net profit, and consequently the company will only be able to meet its fixed charges. Thus, in each of the three years-1917, 1918, and 1919-in consequence of being compelled, by order of the Canadian Railway War Board, to grant increased wages without sufficiently increased rates, the shareholders lost on the average at least between £1,250,000 and £1,500,000 in each of those three years, which they ought to have received in dividends.
The direct imputation conveyed to the shareholders was that the Railway Wat Board was a governmental institution to whose orders railways were subject. It was not. That board was not a statutory body but was an organization formed by the railway companies (including the operators of the Intercolonial) for the express purpose of more perfectly co-ordinating their activities and for the purpose of dealing with large railway questions. The board was organized in 1917. The Grand Trunk's representation was as follows: Mr. Howard G. Kelley, a president, and Mr. W. E. Gillen, chairman of the Administrative Committee. Mr. Gillen subsequently retired and Mr. W. D. Robb, a vice-president of the Grand Trunk, was elected a member of the Administrative Committee. In 1919 the
[Stage Direction]
board was reorganized as The Railway Association of Canada with Mr. Kelley this time as sole president and with Grand Trunk representation on every committee. The 'organization was entirely a railway organization. It was not a Government organization. The organization had, however, no control over railroad rates. The Grand Trunk has American lines as well as Canadian lines. It has traffic originating at American points for Ganadian destinations, The rate for the shorter haul in Canadian territory cannot obviously be greater than the rates on the longer haul for Canadian destinations from American territory. Subject to this consideration, and just as soon as action was taken by the American Commission, every application made by the company for a general increased tariff during the whole of the war period was given effect to, and I am informed by the Board of Railway Commissioners that there is no general application for an increase of rates by the Grand Trunk Railway Company pending or refused, nor was any application of that character pending at the time the meeting was held. The highest dividend distribution of the Grand Trunk amounted to $4,736,241.22. The average dividend payments are much lower without deductions being made for deficits of the Grand Trunk Pacific (the subsidiary of the Grand Trunk and organized by it) which were met by advances made by the Parliament of Canada to an amount in excess of $50,000,000.
Luxury Taxes.
Not only is more revenue necessary but extravagant and luxurious expenditure ought to be checked. Just so long as expenditure on non-essentials and extravagant expenditure continues, just so much longer will the drop in the value of essentials be postponed. On those having income more than necessary for properly maintaining themselves and families, there rests a special duty of saving whenever possible and in this manner adding to the available financial resources for development and for industrial undertakings. Extravagant buying should stop. With this end in view, as well as for necessary revenue, it is proposed to levy on certain specified articles excise taxes which are to be paid by the purchaser to the vendor at the time of sale for consumption or use, or on importation for consumption or use other than resale. Upon certain articles of wearing apparel, such as boots, shoes, etc., in excess of $9 a pair, men's and boys' suite in excess of $45 each, fur coats and

robes in excess of $100 each, women's dresses in excess of $45 each, women's suits in excess of |60 each, men's and women's overcoats in excess of $50 each; hats, hose, neckwear, shirts, purses, and gloves bought above specified prices, and on fans and opera cloaks, it is proposed to levy a tax of 10 per cent of the total purchase price. The women are given a little preference over the men because men's suits in excess of $45 will 'be taxed, whereas women's suits up to $60 will be exempt from taxation.
Mr. BUREAU:: Where does the influence come from?


Sir HENRY DRAYTON:: : The same rate of tax is to apply to trunks in excess of $40 each, valises, suitcases, etc., in excess of $25 each; ivory handled cutlery, cut glass ware, velvet and silk fabrics, lace, ribbons, silk embroideries, and sporting goods.
Under the terms of the French Treaty silks, velvets; lace, and silk embroideries were given a preferential treatment. Not only was France interested in the Treaty but other countries making like importations received full benefits of the Treaty. These countries amounted to eleven in number, including Japan and Switzerland. The operation of the French Treaty ceases on the 19th June next and thereafter, subject to what further action may be taken when the tariff is revised, these articles will take rates from 30 to 35 per cent instead of the present rates ranging from 20 to 27J per cent.
In addition to this, these luxuries will be subject to the above excise tax of 10 per cent on the whole of their purchase price.
A similar tax of 20 per cent of the total purchase price is to be levied upon such articles as cigar and cigarette holders and pipes in excess of $2.50 each, humidors and other equipment for smokers, hunting, shooting, and riding garments, fancy pocket knives, gold, silver, ebony and ivory toiletware, articles of silver adapted for household or office use, jewellery, fur wearing apparel (except as provided above), liveries, oriental rugs, expensive carpets and curtains, and chandeliers.
An excise tax of 10 per cent will also be payable at the time of sale by the Canadian manufacturer or when imported on boats, yachts, canoes, and motor boats (when used for commercial purposes refund of tax is provided for), cameras, candy and confectionery, firearms, shells or cart-

ridges, pianos, organs, musical instruments, and plated ware adapted for household use.
A like tax of 20 per cent will be imposed upon mechanical player pianos, grapho-phones and mechanical musical instruments and records used therewith. Articles of gold adapted for household or office use will be taxed to 50 per cent of the selling prices. A specific tax on playing cards is also provided for. On all cards selling at wholesale rates not over $25 per gross packs, the tax will be 25 cents a pack and in excess of $25, 50 cents a pack.
Excise Tax on Motor Cars.
A. large revenue was received during the year from taxation on motors which totalled $12,962,365, of this amount $6,378,171 being from customs duties and $6,584,194 from excise. The taxation of motors would seem to be a reasonable and proper source of revenue. The field, however, has been always occupied by the provinces, and instead of taxing motors generally, it has been determined to increase the excise tax, which is chargeable both on Canadian and imported cars, from 10 to 15 per cent.
Beer, Wine, and Spirit Duties.
It is also proposed to increase the duties on beer, wine, and spirits.


Mr. LAPOINTE:: That is cruelty.


Jacques Bureau: There is no more beer.


Henry Lumley Drayton: I hasten to reassure my hon. friend that we do not class 2 per cent as beer, and it is therefore not subject to the tax. The proposals call for an increase in the duties on beer of 30 cents a gallon, on non-sparkling wines, 30 cents a gallon; on spirits, $2 a gallon, and on sparkling wines, $3 a gallon. These are in excess of the present duties both customs and excise.


Jacques Bureau: That is the best prohibition law passed yet.
Sales Tax.


Henry Lumley Drayton: In view of the necessities of increased revenues, a tax of one per cent on the sales of all manufacturers, wholesale dealers, jobbers and importers is proposed. The tax will not include retailers as such but w'ill include the goods manufactured or imported by any retailer although manufactured or imported by such retailer for r tail sale by himself. Consideration must also be given to the cost of essentials and on this account it has been determined that the tax
w'ill not apply to sales of meats, fresh, salted or pickled; butter, cheese; oleomargarine, margarine, butterine, or any other substitute for butter; lard, eggs, vegetables, fruits; grains and seeds in their natural state; buckwheat meal or flour; pot, pearl, rolled, roasted or ground barley.; cornmeal, oatmeal, or rolled oats, rye flour, wheat flour; coffee, green, roasted or ground; tea, salt, cattle foods, hay and straw, nursery stock; fish, fresh, pickled, salted, smoked, dried or boneless; sugar, syrups and molasses; anthracite or bituminous coal; artificial limbs and parts thereof, or to goods exported.
The sales tax ought not to be used as a basis of further profits and must not, therefore, be included in the manufacturer's or wholesaler's costs on which profit is calculated. The tax when not absorbed by the vendor must then be included in his invoice as a separate item.
Stamp Taxes.
The existing tax on cheques will be continued, but the rate increased on bills of exchange and promissory notes so as to provide a 2 cent tax on all bills or notes of $100 or less and for every additional $100 ot fractional part thereof 2 cents more. A tax of 2 cents for each share of stock transferred is also proposed.
The method of collecting stamp duties on patent and proprietary medicines and perfumery will be changed by having the stamps affixed by the manufacturer or importer instead of the retailer at the time of sale. The stamps are not to be included in the costs of the manufacturer or importer but if not absorbed by the seller are to be added in the invoice as a separate item.
Removal of Tax on Moving Picture Films.
Under existing legislation a special tax is collected on films used in moving picture theatres. The tax provided is a charge of 15 cents per film for each day upon which such film is used. It has been found that this duty has worked a hardship on small movie theatres. Many complaints nave been received and it has become apparent that the tax in the case of the small theatres sometimes represents a charge of as high a-s 6 or 7 per cent of its total receipts, already subject to municipal and provincial taxation, while in the case of large theatres the tax amounts to less than 1 per cent of receipts. Undoubtedly the present tax is unfair in its incidence and it has been decided to remove it. Movie


Ernest Lapointe: Some change.


Henry Lumley Drayton: -and, (f) to
safeguard the interests of the Canadian people in the existing world struggle for commercial and industrial supremacy.
As a means of raising revenue, the tariff should be so adjusted as to place the chief burden upon those best able to bear it. Articles of luxury should be heavily taxed through the imposition of customs and excise rates. Food commodities and other necessaries of life, not produced or manufactured in Canada, should, if taxed at all, bear only such imposts as are necessary for revenue purposes. Those produced in Canada should be subjected to such customs duties only as may be necessary in the general national interest to be determined after strict investigation from time to time.
Apart from the question of revenue, the tariff should have regard to the maintenance, stability and prosperity of Canadian enterprise in the development of all our natural resources in lands, forests, mines, fisheries, as well as our agricultural and manufacturing industries. Consideration must also be given to the importance of creating and maintaining conditions that will afford to Canadian industrial workers
opportunities for steady and remunerative employment. It is undoubtedly in the true interests of Canada as a whole that Canadian workers should not be forced to seek in foreign countries employment and opportunity denied them at home by reason of the export of the natural resources, primary products, and raw materials with which the Dominion is so amply endowed.
For the purpose of encouraging the fullest development of our natural resources the tariff should be so adjusted as to permit machinery and the implements of production to be purchased at prices that will compare equitably with those paid in other countries for similar articles. The revised tariff law should be so framed and administered as to effectively prevent any customs duty being used to facilitate the formation or maintenance of any combine, trust, association or agreement among manufacturers, dealers, or producers for the purpose, at the expense of the general public, of restraining trade, preventing competition, or unduly enhancing the selling price of any article of commerce. The principle of trade preference between the different members of the Britannic Commonwealth should be maintained and extended from time to time to such degree as may be found practicable and consistent with Canadian interests.
While a general revision of the Canadian tariff based upon the foregoing considerations is due, it must be recognized that, owing to the war, economic and commercial conditions the world round have been profoundly disturbed and that, as a consequence it is neither practicable nor possible in the national or public interest to undertake such revision until a thorough inquiry is made to ascertain the essential facts upon which tariff provisions must necessarily be based.
All the financial difficulties of the moment can be, and I have no doubt will be, readily met. I am confident that every hon. gentleman has the firmest belief and confidence in Canada-and that belief is well justified. Immigration and a reasonable investment of outside capital rendering our illimitable national resources available, but above all the national characteristics and strength of character of the citizens of Canada, will easily surmount the past. And Canada's situation to-day is indeed an enviable one. There is no country in the world that can offer greater inducements to the immigrant and greater inducements to foreign capital than Canada can. Prosperity is entirely relative. Our position relatively has

enhanced. We have finished borrowing, and notwithstanding the great increase in our debt, Canada's securities to-day stand as high, or higher, than those of any foreign country in what is to-day the great market for foreign securities-New York. Canada's world status is far greater to-day notwithstanding her losses and war debts than it was in 1914.
I crave the indulgence of the House, Mr. Speaker, for the length of time I have spoken before introducing these resolutions. I wonder if before reading them I might not say just one or two words more. You know, some people to-day think, and apparently believe, that the country is in a bad state; I do not. Some people to-day think, and apparently believe, that the job ahead oi Canada is a bigger job than Canada can look after; I do not. I wonder if we are not altogether too prone to forget what Canada has done; I wonder if we are not entirely too prone to forget the amount of hard work, of sacrifice and of devotion that the Canadian people showed themselves capable of sustaining during the war period.
Are we not a little too apt to forget that it was the soldiers of Canada who formed just a few short monlths ago the spearhead of the forces of righteousness? Are we not a little too apt to forget that we have got the same spirit and the same blood in Canada yet? Are we not a little too apt to forget that their magnificent achievements never could have been and never would have been possible had not the men behind and, indeed, the women, too, seen to it that the soldiers were supported, that reinforcements were sent? Yes, the war record is a glorious record; but there were other war activities. Why, there is no better record than the record of the Canadian Medical Staff; no better record than the record of Canada's production; no better record than the record of Canada's transportation facilities, which remained at a higher point than did those of any other country engaged in the war.
Does it not seem rather ridiculous for any one to seriously think that a nation that has done so much will not now be able to look after its own business; that a nation that has done so much for Europe and the world is not going to do something for Canada- something for that Canada which is so dear to every Canadian, something for that Canada which is to-day so infinitely more precious and glorious by reason of the sacrifices made by her fighting men than she ever was before, something for that cohintry which the very best of us in consecrating his services to her is compensated

by the thought that it is impossible for any Canadian to do too much for Canada?



RESOLUTIONS.

[Stage Direction]
I beg to give notice that upon the House resolving itself into committee I shall move the following resolutions:
Resolved, That it is expedient to amend The Special War Revenue Act, 1915, and to provide :-
1.	That the following- excise taxes be imposed, levied and collected on the total purchase price of the articles hereinafter specified, and on articles of clothing the said tax may be imposed upon the combined selling price of materials and cost of manufacture when sold separately:-
(a)	A tax of ten per cent on,-
Boots, shoes, pumps and slippers of any material (not including shoes or appliances made to order for persons having a crippled or deformed foot or ankle) in excess of $9 per pair;
Hats, men's and boy's in excess of $5 each;
Caps, men's and boy's in excess of $2 each;
H-ose or stockings, silk, men's and boy's, in excess of $1 per pair;
Neckties and neckwear and scarfs, men's and boy's, in excess of §1.50 each;
Clothing consisting of coat, vest and pants or coat and pants, men's and boy's, in excess of $45;
Cloth overooats, men's and boy's, women's and misses', in excess of $50 each ;
Waistcoats, men's sold separately from suits, in excess of $ 5 each;
Shirts, including night shirts, men's and boy's, in excess of $3 each;
Hats, bonnets and hoods, women's and misses', in excess of $12 each;
Hose or stockings, silk, women's and misses', in excess of $2 per pair;
Kimonos, petticoats and waists in excess of $12 each;
Nightgowns in excess of $3 each;
House or smoking jackets or bath and lounging robes;
Pyjamas and underwear in excess of $5 ;
Pans;
Purses and pocket-books, in excess of $2 each ;
Shopping and hand-bags in excess of $ 6 each;
Umbrellas, parasols and sunshades in excess of $4 each;
Trunks in excess of $40 each;
Valises, travelling bags, suitoases, hat boxes and fitted travelling cases in excess of $25 each;
Gloves, except fur in excess of $3 per pair;
Dresses, women's and misses', in excess of $45 each;
Suits, women's and misses', in excess of $60 each;
Opera cloaks;
Coats and robes, the component material of chief value being fur, in excess of $100 each;
Ivory handled cutlery;
Cut glassware;
Sporting goods, such as tennis rackets, nets, racket covers and presses, skates, snowshoes, skis, toboggans, canoe paddles and cushions, polo mallets, baseball bats, gloves, masks, protectors, shoes and uniforms, football helmets, harness and goals, basket-ball goals and uniforms, golf bags and clubs, lacrosse sticks, balls of all kinds, fishing rods and reels, billiard and pool tables, chess and checker

boards and pieces, dice, games and parts of games (except playing cards and children's toys and games), and all similar articles commonly or commercially known as sporting goods in excess of 50 cents;
Plated ware not otherwise provided for in this resolution adapted for household or office use ;
Velvets, velveteens, plush and silk fabrics;
Embroideries of silk;
Lace, including collars or collarettes of lace and all manufactures of lace;
Ribbons of all kinds and materials;
(b)	A tax of twenty per cent on,-
Cigar and cigarette holders and pipes in excess of $2.50 each;
Cigar and cigarette cases, ash trays and match boxes of gold or silver;
Humidors and smoking stands;
Hunting and shooting garments and riding habits ;
Hunting and Bowie knives;
Gold and silver handled pocket knives and pencils;
Gold, silver, ebony and ivory toiletware;
Articles of silver not otherwise provided for in this resolution adapted for household or office use;
Silver or gold deposit ware;
Wearing apparel, not otherwise provided for in this resolution, the component material of chief value being fur ;
Liveries, livery boots and hats;
Oriental rugs ;
Carpets in excess of $3 per yard;
Curtains, including tapestry curtains, in excess of $7.50 each;
Chandeliers, except for churches;
Articles commonly or commercially known as jewellery, whether real or imitation, for personal use or for adornment of the person.
(c)	A tax of fifty per cent on:-
Articles of gold not otherwise provided for
in this resolution adapted for household or office use.
2.	That the excise taxes as imposed by the preceding resolution shall be paid by the purchaser to the vendor at the time of sale for consumption or use, or on importation for consumption or use other than for re-sale, in addition to the duties of customs already imposed, and by the vendor to His Majesty in accordance with such regulations as may be prescribed.
3.	That the following excise taxes be imposed, levied and collected on the articles hereinafter specified, namely:-
(a)	A tax of ten per cent on:-
Boats, yachts, canoes and motor boats. Provided that on satisfactory proof being furnished that these articles will be used only for trading or commercial purposes a refund of the amount paid under this resolution shall be granted;
Cameras weighing not more than 100 pounds;
Candy and confectionery;
Chewing gum or substitutes therefor;
Fire-arms, shells or cartridges for use other than for militia purposes;
Pianos and organs (other than pipe organs) ; musical instruments not otherwise provided for in this resolution;
(b)	A tax of fifteen per cent on:-
Automobiles adapted or adaptable for passenger use.
(c)	A tax of twenty per cent on:-
Mechanical piano players, graphophones,
phonographs, talking machines, music boxes and records used in connection therewith or with any musical instrument.
(d)	A tax on playing cards for every fifty-four cards or fraction of fifty-four in each package; when selling at $25 or less per gross packages, twenty-five cents per pack; when selling in excess of $25 per gross package, fifty cents per* pack.
(e)	A tax of thirty per cent on:-
Patent and proprietary medicines including
medicinal or medicated wines, vermouth and ginger wine containing not more than forty per cent of proof spirit.
(f)	A tax of two dollars per gallon:-
On rum, whiskey, brandy, gin, wines containing more than forty per cent proof spirits, cordials, liqueurs and spirituous and alcoholic liquors not otherwise provided for in this resolution suitable for beverage purposes;
On lime juice or fruit juices, fortified with or containing more than twenty-five per cent of proof spirits;
On spirits and strong waters of any kind, mixed with any ingredient or ingredients, as being or known or designated as anodynes, elixirs, essences, extracts, lotions, tinctures or medicines, or ethereal and spirituous fruit essences, not otherwise provided for in this resolution ;
On alcoholic perfumes and perfumed spirits, bay rum, cologne and lavender waters, hair, tooth and skin washes, and other toilet preparations containing spirits of any kind.
(g)	A tax of thirty cents per gallon:-
On ale, beer, porter and stout;
On wines of all kinds, except sparkling wines, containing not more than forty per cent pf proof spirits.
(h)	A tax of three dollars per gallon:-
On champagne and all other sparkling wines.
(i)	A tax of fifty cents per gallon:-
On lime juice and fruit juices, fortified with or containing not more than twenty-five per cent of proof spirits not otherwise provided for in this resolution.
4.	That the excise taxes as imposed by the preceding resolution shall be payable in addition to the present duties of excise and customs at the time of sale by the Canadian manufacturer or when imported, but shall not apply to such articles when exported, and shall be accounted for to His Majesty in accordance with such regulations as may be prescribed.
5.	That every person selling or dealing in the articles upon which taxes are imposed as prescribed by the foregoing resolutions, may be required by the minister to take out an annual license therefor, for which license a fee not exceeding $2 shall be paid.
6.	That the provisions of the said foregoing Resolutions shall be deemed to have come into force on the 19th day of May, 1920, and to have applied to all goods mentioned therein imported or taken out of warehouse for consumption on and after that day, and to have also applied to goods previously imported for which no entry for consumption was made before that day.
7.	(a) That a tax of one per cent in addition to the present duties of excise and customs be imposed, levied and collected on sales by manufacturers, wholesalers, or on importations;
[Stage Direction]
that the purchaser shall be furnished with a written invoice of any sale, which invoice shall state separately the amount of such tax, when not included in the purchase price; that such tax must not be included in the manufacturer's or wholesaler's costs on which profit is calculated; and the tax shall be paid by the purchaser to the wholesaler or manufacturer at the time of such sale, and by the wholesaler or manufacturer to His Majesty in accordance with such regulations as may be prescribed, and such wholesaler or manufacturer shall be liable to a penalty not exceeding $500, if such payments are not made, and in addition shall be liable to a penalty equal to double the amount of the excise duties unpaid.
(b)	That the minister may require every manufacturer and wholesaler to take out an annual license for the purposes aforesaid, and may prescribe a fee therefor, not exceeding $5, and the penalty for neglect or refusal shall be a sum not exceeding $1,000.
(c)	That any such tax, costs or penalties may, at the option of the minister, be recovered and imposed in the Exchequer Court of Canada or in any other court of competent jurisdiction, in the name of His Majesty.
(d)	That this tax on sales shall not apply to sales or importations of meats, fresh, salted or pickled; butter; cheese; oleomargarine, margarine, butterine or any other substitute for butter ; lard ; eggs; vegetables; fruits; grains and seeds in their natural state; buckwheat meal or flour; pot, pearl, rolled, roasted or ground barley; corn meal; oatmeal or rolled oats; rye flour; wheat flour; coffee, green, roasted or ground ; tea; salt; cattle foods; hay and straw; nursery stock; fish, fresh, pickled, salted, smoked, dried or boneless; sugar, syrups and molasses; anthracite or bituminous coal; artificial limbs and parts thereof or to goods exported.
(e)	That the provisions of this Resolution respecting a fax on sales shall be deemed to have come into force on the 19th day of May, 1920, and to have applied to all goods imported or taken out of warehouses for consumption on and after that day, and to have also applied to goods previously imported for which no entry for consumption was made before that day.
8.	That a stamp tax of two cents be imposed, levied and collected on promissory notes and bills of exchange of the value of one hundred dollars or less, and that a tax of two cents additional be imposed on every one hundred dollars or fractional part thereof in eexcss of one hundred dollars.
9.	That a stamp tax of two cents be imposed, levied and collected on each share of stock transferred.
10.	That the provisions of the said Act relating to stamp duties on bottles and packages containing a proprietary or patent medicine or perfumery requiring that an adhesive stamp be affixed to such articles by the person selling the same, or by the importer, the manufacturer or producer, be amended to provide that the said provision shall remain in force as regards the Stock of such articles in retail stores remaining unstamped on the Silst July, 1920, and such stock may be sold1 in accordance with such provisions until the 31st day of December, 1920, but on and after such last mentioned date every such article must be stamped before being exhibited or offered for sale. The stamps shall be affixed to all such articles on or after 1st

August, 1920, by the manufacturer or importer thereof, or by such person as the minister may prescribe.
11.	That respecting bottles or packages containing wines, sparkling and non-sparkling, manufactured or imported' previous to the nineteenth day of May, 1920, stamps 'as set forth in the said Act shall be affixed thereto under regulations made by the minister.
12.	That the provisions of the said Act relating to moving picture films, and all the other provisions of the said Act inconsistent with these Resolutions, be repealed.
Resolved, that it is expedient to amend The Income War Tax Act, 1917, and the amendments thereto, and to provide:
1.	That the taxes and surtaxes, including the tax upon corporations and joint stock companies, leviable and payable under the provisions of section four of the said Act as enacted by chapter fifty-five cf the statutes of 1919 shall each be increased by five per centum on incomes of five thousand dollars and upwards, such increases to apply to all taxes and sur. tax leviable for any income received during the calendar year nineteen hundred and nineteen or the income of any accounting period ending in nineteen hundred and nineteen, as the case may be, and for each calendar year or accounting period thereafter;
2.	That each person liable to taxation under the said Act and the amendments thereto for the calendar year nineteen hundred and twenty or any accounting period ending in the year nineteen hundred and tweny and for each calendar year or accounting period thereafter shall deliver to the Minister of Finance, with each annual return of his income prescribed by section seven of the said Act as amended, an amount equal to at least one-fourth of the amount of the tax and surtax, if any, payable by such person according to such return, and shall pay the balance, if any, cf such tax and surtax in not more than three bimonthly instalments theretafter, together with interest at the rate of six per centum per annum from the date prescribed for making such return up to the time of the payment of such instalment;
3.	That any person making a return of income less than the correot amount shall pay the additional amount of tax and surtax due and in addition interest at the rate of ten per centum upon such amount until the same is paid.
If such deficiency exceeds ten per centum but is under twenty per centum, such person shall also pay an amount equal to one-half of the amount of such deficiency in addition, and if such deficiency amounts to twenty per centum or more such person shall pay an amount equal to the amount of such deficiency in addition.
Resolved, that it is expedient to amend The Business Profits War Tax Act, 1916, and the amendments thereto, and to provide:
1.	That the profits earned in any business (luring any accounting period ending in the year one thousand nine hundred and twenty which do not exceed ten per cent per annum upon the capital employed in such business shall be exempt from the tax prescribed by the Act;
That upon any such profits exceeding ten per cent per annum and not exceeding fifteen per cent per annum there shall be paid a tax equal to twenty per cent of such profits;

That upon any such profits exceeding fifteen per cent per annum and not exceeding twenty per cent per annum there shall be paid a tax equal to thirty per cent of such profits;
That upon any such profits exceeding twenty per cent per annum and not exceeding thirty per cent per annum there shall be paid a tax equal to fifty per cent of such profits ;
That upon any such profits exceeding thirty per cent per annum there shall be paid a tax equal to sixty per cent of such profits;
That in the case of a business owned by an incorporated company with a capital of' not less than twenty-five thousand dollars and under fifty thousand dollars employed in such business, there shall be paid a tax of twenty per cent of the amount by which the profits earned in such business during any accounting period ending in the year one thousand nine hundred and twenty exceeded ten per cent per annum;	[DOT]
2.	That in respect to any business liable to taxation under the said Act having a capital of less than fifty thousand dollars the rates of taxation set forth in section three of the
said Act as amended by chapter six of the statutes of 1917 shall apply in respect of the 1917 and 1918 accounting periods, if twenty per cent or more of such profits have been derived from the manufacture or dealing in munitions of "war or materials or supplies of any kind for war purposes;
3.	That the period during which the said Act is to be in operation be extended for one year, and that section twenty-six of the said Act be amended by substituting the word "twenty" for the word "nineteen" in the third line thereof, and by substituting the word "seventy-two" for the word "sixty" in the fourth line of the proviso in the said section.
1.	Resolved, that it is expedient to amend Schedule A to the Customs Tariff, 1907, and to strike thereout tariff items 172 and 483, the several enumerations of goods respectively, and the several rates of duties of customs, if any, set opposite each of the said items, and to provide that the following items, enumerations and rates of duties be inserted in said Schedule A:
Tariff Items	-	British Preferential Tariff.	Intermed- iate Tariff.	General Tariff.172	Books, viz.:-Books on the application of science to industries of all kinds, including books on agriculture, horticulture, forestry, fish and fishing, mining, metallurgy, architecture, electric and other engineering, carpentry, shipbuilding, mechanism, dyeing, bleaching, tanning, weaving and other mechanic arts, and similar industrial books; bibles, prayer-books, psalm and hymn-books, religious tracts, and Sunday school lesson pictures.	Free.	Free.	Free.483	Stereotypes, electrotypes and celluloids of books, and bases and matrices and copper shells for the same, whether composed wholly or in part of metal or celluloid	Free.	Free.	Free.698a	Typewriters and writing appliances specially adapted for use only by the blind, under regulations prescribed by the Minister of Customs and Inland Revenue	Free.	Free.	Free.2.	Resolved, that it is expedient to amend Chapter 3 of the Acts of 1915 and Chapter 47 of the Acts of 1919, and to strike thereout Section 3 of Chapter 3 of the Acts of 1915 and Sections 3 and 4 of Chapter 47 of the Acts of 1919.3.	Resolved, that it is expedient to provide that the provision of the foregoing resolutions shall be deemed to have come into operation on the nineteenth day of May, one thousand nine hundred and twenty, and to apply and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that day, and to have also applied to such goods previously imported for which no entry for consumption was made before that day,
Hon. W. S. FIELDING (Shelburne and Queen's):: 'Mr. 'Speaker, while we can
hardly be expected to agree with all that my hon. friend the Minister of Finance (Sir Henry Drayton) has said, I am sure that I can speak for my friends ori this
side of the House as well as for myself when I offer him my very sincere congratulations upon the manner in which he has performed, coming to him as it does for the first time, the duty of presenting that annual statement of our financial affairs which we call the Budget Speech.
At all times the preparation of the Budget is a matter calling for painstaking labour. It is a matter of large responsibility which any Minister of Finance must necessarily take very seriously, and that responsibility has fallen on my hon. friend at this time under circumstances of more than usual difficulty. There is a notion in some minds that the Government during the war had a hard time, and I am not sure but that my hon. friend the ex-Minister of Finance (Sir Thomas White), may have had the idea that he particularly had a hard time. That is

all a mistake. The Government did not have a hard time during the war. The burden of carrying a load is not to be measured merely by the weight of the load, one has to have regard to the condition of the highway over which it has to be carried. A light load may be heavy where the road is rough and the grade hard. In the case of a heavy load, if the road is smooth and the grade not steep, the yoke is easy and the burden light. So it was with the Government during war time. There was a condition of the country unusual, it is true. My hon. friends opposite had to deal with some new and unusual problems, hut if they had to deal with new problems they found a new spirit abroad in the land to meet those problems. The patriotic spirit of the country, stirred as it should have been, and was, by the war, stood behind the Government during the whole period of the war. The Government had the support of Parliament to an extraordinary degree. Did they want appropriations? Tens and hundreds of millions of dollars were voted to them promptly, unanimously, and with less inquiry than will be made to-day on a $1,000 appropriation. Did they want men? Until a little unpleasantness occurred towards the end of the war, they had the men almost tumbling over each other in their desire to volunteer and participate in the war. Did they want loans?- The hon. Minister of Finance had only to issue his proclamation, and the people responded with an enormous sum of the public money. In all these things the way was easy. The Prime Minister and his colleagues had only to ride on the crest oi the wave. But now is the time of trouble. My hon. friend the Minister of Finance of to-day has the heavy end of the load. The difficulties are coming to-day and there have been no such difficulties in the past, as some persons have too hurriedly imagined.
My hon. friend the Minister of Finance has taken hold of the Government's enterprise at the present time under certain circumstances of difficulty, but in one respect he has been highly favoured, and he is to be congratulated. The hon. gentleman came into office just about the time it became necessary to float another loan, and the response that was made to his demand in that respect, I am sure, must have been gratifying to him, as it was to the country generally. It is very gratifying to know that the Canadian people responded so liberally to that demand, and I think that perhaps my hon. friend the ex-Minister of 
Finance (Sir Thomas White) may look on the situation with a little of envy, because the present Minister of Finance received his $670,030,000 without offering the bait of tax exemption. So I am inclined to think my hon. friend the ex-Minister ot Finance may look on the Finance Minister of to-day with a little of envy, and perhaps feel that if he had had more courage he might have had a similar experience. It is, of course, gratifying to know that this money has been obtained, and yet there is a thought which we cannot put aside when we are reminded that of about two billions of dollars of these loans floated, $1,3Q0,000,-
000	are exempt from taxation. A bargain is a bargain. The Government of the day agreed that these should be exempt, but I have never concealed from myself the fact that that exemption is going to be a continuous source of trouble.
1	am afraid it will be one of the things which will tend to increase the disrontenl which unhappily prevails. But the contract was made, and there is no use complaining of it. I know there were some reasons which tempted my hon. friend the Minister of Finance (Sir Thomas White) of that day to offer the loan in that ,vav, and I am not saying that he was wrong. But looking back over it, I think he will agree that it is a pity he did not have more courage and ask the people of Canada to present this money to the Treasury without offering the bait of tax exemption.
I remember meeting a distinguished visitor to Canada several years ago who had been here in former years, had gone away and returned. He was noting the many things in which Canada had made progress and when somebody said, "Yes, Canada has become known to the world," "Ah, yes," he replied, "not only has the world discovered Canada, but Canada has discovered herself," and that he thought was a good thing. Well, in the matter of finance, surely we will all say that Canada has discovered herself to a surprising and a gratifying degree.
I think I am right in saying that the largest loan ever offered by the Dominion of Canada before the war was a loan of $30,000,000, or six million pounds sterling. It was offered in England, and I remember it was with fear and trembling that we asked so large a sum; and when it was suggested to the financiers of London that perhaps it might be expedient to increase the amount to $50,000,000 instead of $30,000,000 they gravely shook their heads and said, "Oh dear, no; that is too much." So that

$30,000,000 was all we dared then ask from the financiers of London. Yet, here in this country, our own Canadian people were prepared to put their hands into their own pockets and in so brief a time to bring out $2,000,000,000 to meet the demands made upon them. And at one fell swoop the Minister of Finance found them offering him $670,000,000, the amount of the last loan. All that is very gratifying in some respects; but there is no rose without its thorn, and there are some things in connection with that loan which we may as well frankly recognize.
There is one feature which, while well known to the inside circle of finance, has not been made known in any marked way to the Canadian public at large, and I think it is time that the Canadian people knew something about it. If you take up the last volume of the public accounts, for the year ending March 31, 1919, you will find a couple of interesting items. There is a later volume than that but we have not got it. For that period, however, any hon. member will discover in the statement of receipts and expenditures an item called "Bank of Montreal Loan Trading Account,"-a very interesting account. Hon. members will read the item therein contained and will discover that the Government paid out on that account the sum of $7,450,000 and got back $5,177,904, so that on that account, whatever it means, the Government of Canada-in other words, the people of Canada-lost $2,272,000. Now, what does that mean? It means, to put the matter plainly, that the Government have been trading on the stock exchange with the money of the people of Canada. That is the plain way to put it. I know what will be said by hon. gentlemen opposite; I anticipate the explanation and will give it voluntarily myself. We have no returns for the year just closed. But I venture to say that in all human probability the loss on that trading account during the last twelve months was even much greater than it was in the previous year. Now, it will be said on behalf of the Government that this has been done to stabilize the loan. The Government will say-reasonably and with some force-that they were looking forward to putting other loans on the market, and were concerned with keeping up the price, and therefore made this arrangement with the banks for them to buy bonds in order to prevent depreciation. That, I think, was the object in view.


Mr. CURRIE:: You are all wrong.


Sir THOMAS WHITE:: If my hon. friend will pardon an interruption, I should like to
point out that he is entirely wrong on the so-called trading account. In the year 1918 the Government not only did not lose money but made money. The stabilization did not cost the Dominion Government one cent.


William Stevens Fielding: I am exceedingly glad to hear that statement from my hon. friend, but the public accounts show


John Allister Currie: You are wrong.


Some hon. MEMBERS:: Order.


William Stevens Fielding: I give the items as they appear in the public accounts:	"Bank of
Montreal Loan Trading account." This item shows that the bank received $7,450,000 and that there was paid back into the Treasury, credited on the other side, $5,177,904, so that there is apparently, between the receipts and the expenditures, a difference, roughly, of $2,272,000.


William Thomas White: Represented in bonds which were taken in-cancelled.


William Stevens Fielding: The item is charged
up on one side as expenditure and on the other side as receipt, and I cannot see any other explanation than that I have given. I recognize, of course, that the object of the Government was to stabilize the loan in order to prevent depreciation, and there is this to be said, that war time conditions must necessitate war time methods, during and even after war. I am not saying that there was absolutely no justification for the ground which the Government took; on the contrary, I admit the force of the argument that may be advanced. I can understand that the minister, anxious to have the support of the financial houses, would offer them a guarantee and assurance that if they would invest their money in the bonds they would be protected against loss. I can understand that there would be a temptation to do that, and I think I am stating fairly the reason which the Government had in view. All I desire to say, however, is that if you want to understand that transaction completely you must apply to a private corporation the principle which it involves. An individual owner of shares, -a director owning shares,-would be justified in spending his own money to support stock in the market; but if a corporation had issued a block of securities at a certain price and sold them to the public, and if, with a view to keeping up the price, they then took the money of the company and went out to buy the shares in order to keep up the market, that would not be considered a very sound financial trans-

action. Indeed, I think that would be a transaction which, if it occurred in connection with a private corporation, would be very severely criticised. Well, what is sound business in the case of a private corporation may, to say the very least, be usefully applied to the operations of a government. I quite appreciate the object which the Government have had in view, and I am not sure that any other Minister of Finance would not have been tempted to do the same thing. At the same time, however, I regard this as a financial measure which is open to grave question, and at all events it would be wise on our part to advise the Minister of Finance not to do the same thing again if he can help it. If he has given assurances to the financial houses he must keep faith with them, but it would be well that he should avoid in the future a method such as this. I find that the same question has arisen in the United States. Various efforts are being made there to give an artificial and fictitious value to United States bonds, and a measure was introduced in the United States Congress for the purpose of attaining this end by exchanging one form of bond into another, issuing a new bond which was of a more attractive character, the probable result being that prices would be kept up. The matter came before the Secretary of the United States Treasury who was asked to give his opinion thereon, and Secretary Houston wrote a letter, of which I shall read only a part:
As the Treasury views it, the present depreciation is due chiefly to the fact that of the 2 0,0'O O', 000 Americans who patriotically subscribed during: the war large numbers have not been willing or able to exercise such control over their personal expenditures as would enable them to retain their bonds after the cessation of hostilities.
Many patriotic people who bought Liberty bonds under the impulse of patriotism have been unwilling since the war was over to continue to lend their money to the Government and have forced their holdings on the market more rapidly than others could save funds to invest, with consequent depreciation in market prices. The remedy is for the people to work and save, to keep their holdings of Liberty bonds as investments and to purchase additional Government securities with their savings.
The present prices of Liberty bonds are causing no loss to real investors, who are holding their bonds as permanent investment; they are not suffering because others see fit to sell their bonds now for less than they are worth, and neither these investors nor those who wish to sell their bonds have any ground for expecting a donation from the United States in the form of additional tax exemptions or othet; privileges.
I think that opinion of the United States Secretary of the Treasury might usefully be

applied in Canada. If it has been necessary to do these things in order to stabilize bonds and to give them an artificial value it is a policy that we should get rid of at the earliest possible moment consistent with the obligations that have already been assumed.
There is another feature in relation to the loans which we must present, not by way of complaining, but merely that the public may see all sides of the question. It is, a3 I have said, a very gratifying thing to find that the people of Canada are able to subscribe so handsomely to these loans It is a grand thing to know that we have ihis immense sum of money in Canada, and I warmly congratulate the Minister of Finance on his success in obtaining it; but at the same time there is an old, homely proverb that you cannot eat your cake and have it. This vast sum of money which has been absorbed for the purposes of the Government has been withdrawn from the ordinary fields of industrial and other activities in Canada. It is money which, if the Government had not taken it, would have remained in the pockets of the people until they could find a convenient investment for it in some of the forms of industrial or commercial activitiy. If you take that vast sum away from the people you diminish to that extent their ability to carry on the ordinary business of the country-that is clear enough.
There was no immediate effect and for the reason that at the first stage of these operations no actual money passed. The man who subscribed for bonds gave a cheque on his account in the bank and handed it over to the credit of the Minister of Finance. It went to the credit of the Minister of Finance and there was really no actual passing of money. It was only as time passed ana when the Government began to absorb this money that we began to feel the effect of it. What is the effect of it? We are beginning to see to-day that in consequence of the withdrawal of these large sums of money the banks are finding themselves a little harder up. The usual story put forward in the public and financial press is that the banks are contracting their credits. They will have to contract their credits because as fast as money is paid or used for the purposes of these loans it passes away and the banks do not have it any longer. It will be seen that we are beginning to feel now some of the effects of the withdrawal of this vast sum of money from the ordinary fields of activity.

We feel it too in another way. There is the housing problem all over Canada to-day. Certainly, housing is one of the chief needs in all big cities and towns. It is partly because during the war there was less activity than usual in mortgage and building operations, partly because building materials are high in price, but it is largely because there is no longer money available to lend to people who want to buy property and build houses. When the Government are offering 54 per cent on a gilt edged security, the finest security that exists in the world perhaps except British consols-when the Government are offering 7 per cent for money in New York, when they are borrowing money to-day under the guise of the National railway in New York at 7 per cent; when the Government are offering these large rates of interest to the public, what is more natural than that the funds of the people shall flow into the treasury of the Government and that they shall not be available for various other purposes? I believe that the housing difficulty to-day is to some extent-to a considerable extent-the result of that policy. Mind, I am not complaining; the Government had to have money and they got the money which it was absolutely necessary they should get, but we should remember that in getting it for the purposes of the Government it is not available for other purposes.
The lesson that I would draw is this: It is a great thing to be able to get our capital in Canada when you have to get it. It was a great thing to be able to get money in Canada when the money markets of London and New York were closed against us. It was a great thing that in a condition of emergency we could get the money. But it is just as well to remember that Canada is a comparatively young and a com-partively undeveloped country. Canada is a country which will need capital and therefore it is exceedingly desirable that the Government should gradually get its finances into a condition which will enable it to go when new loans are needed-let us hope they will not be needed right away- to the money markets of the world. If they need new loans it is most desirable that the Government, if possible in the financing of Canada, should appeal for those loans to the ordinary money markets of the world. In order that local capital may be made available for the development of local interests, housing enterprises and other activities I trust that when the moment comes
for another loan the conditions will be such that the Minister of Finance will not have to raise it at home but will get it somewhere abroad.
The Minister of Finance certainly has, as I have said, an exceedingly difficult task. I wonder if the public really understand it. I do not think they do. If you strike a man a little blow he knows what hit him and he perhaps measures the pain. Hit him a little harder blow and you simply knock him speechless and he does not know what happened. I think that the man in the street has had such a hard blow in regard to these big questions of debt that we talk so much about, that he is knocked out. The figures are so large that they are rather beyond his comprehension.
I wonder if the public really understand the financial position of Canada to-day. The Minister of Finance has very fairly put it before the public and I am anxious only to help him in the matter. I am anxious that the people should appreciate the situation to-day, I do not speak of this matter in any complaining spirit, or in any party spirit,' but I am anxious that they should actually understand the tremendous burden that they are taking upon themselves and the share of the burden that they must carry in order that the finances of Canada may be made sound and that the credit of Canada may be upheld. I want to offer a few comparisons, not as between the administration of on Government and another, not as between the period of one party and another, but as between a year before the war and a year after the war. I cannot expect to offer anything that is new but I will merely to put one or two things in striking contrast-


Sir GEORGE FOSTER:: If my hon. friend does not wish to commence a new subject at this time we might call it six o'clock.


William Stevens Fielding: Very good; thank you.
At Six o'clock the House took recess.
After Recess.
The House resumed at Eight o'clock.


William Stevens Fielding: The Minister of Finance, in his speech which we had the pleasure of listening to this afternoon, very properly gave us a mass of statistics on the business of the country which we shall have the pleasure of seeing in Hansard. The figures can be better



examined then, and I presume they will be found useful for the purposes of reference.
My hon. friend in very general terms expressed a note of hope and wholesome optimism, and desired it to be understood that he had great faith, great hope and great confidence in Canada. I sympathize with all those sentiments and I am glad to be able to say that I also have not less confidence than has my hon. friend in the ultimate judgment, success and prosperity of the Canadian people. I think they aie about the sanest people on earth; I know of the people of no other nation who are more sane and very few that I would say to-day are as sane as the Canadian people. I feel confident that when they fully understand things they will appreciate the difficulties which the Government, and every man in public life, has to face; that they will make all due allowances for those difficulties and that they will be actuated by the desire to assist the minister and the Government to -bring about satisfactory results. That will be accomplished -all the quicker, and all the more certainly, if we endeavour to give them a clear appreciation of what the situation is.
I mentioned before you left the Chair at six o'clock, Sir, that I was afraid the ordinary individual-as we say, the man in the street: the man who makes no special study of public affairs and yet is an interested and patriotic citizen-I expressed the fear that be has failed to appreciate the seriousness of the position. I do not say that in any pa-rty sense. No matter what Government might be in power it would be a very serious position, and I am anxious that 'the people generally shall come to understand it fairly and well.
When a Minister of Railways, a few years ago, -came into this House with a deficit on the operation of the Government railways of perhaps six, or seven, or eight hundred -thousand dollars, there was -a keen appreciation of what that -meant. There was keen- ^questioning, there wa-s sharp criticism, there was wide inquiry; the people understood, and could appreciate' -a deficit of such an amount in the Government railway operations. But this year the Minister of Railways comes in and frankly acknowledges that the deficit on the operation of the Government railways during the last year was $47,000,0000. Well, that is an illustration of what I described before as the "knock-out" argument; the thing is really iso big as to be beyond the comprehension of the ordinary m-an.

I was about to make -a few -comparisons, not as between party and party, or as between government an-d government, but merely between a year before the war and a year afterwards, in order that by some simple and sharp contrasts I -might help the Minister of Finance to h-ave the public clearly understand the great -change th-at has taken place. Now, let us take the year 1914. The year ended 31st of March, 1914, was a year before the (war, and the year 1920, ended a few days ago, was a year after the war. With respect to the first period the public accounts, of course, are available. With respect to the second -period the volume of public -accounts is -not out- the year only closed a few days ago. But the minister has, both in his -speech and elsewhere, furnished us wit-h information which gives us a general idea of the operations of the year 1920. Noiw -the revenue for the year 1914 was $163,174,394.56. I come now, for the purpo-ses of comparison, to the estimate for the year 1920, -and here I find -a little difficulty. The -minister today, I -think, stated that his estimate o-f the revenue for the year 1920 was $388,000,000. Weil, there have no doubt been reasons for a very recent revision of my hon. friend's figures, because only a few days ago, before the end of the year, in answer to a motion for returns, my hon. friend's department issued -a statement -showing that in Itheir judgment the revenue for 1920 would be $325,000,000. If, in -the few days that have elapsed, my hon. friend has h-ad reason to enlarge his estimate of the revenue I am very glad o-f it; but I shall have to -make the comparison which I -am about to make on the hasi-s of the figures which he supplied a short time ago. According -to those figures, in 1914 we received a -revenue of $163,174,394.56 and for the year 1920, $325,000,000-which -the Minister of Finance has now enlarged to $388,000,000. Well, if there were nothing but the revenue statement to look at, that would be a very gratifying situation. According to my hon. friend's latest figures the revenue.'has more than doubled. Let us convert it into revenue per head of population for convenience of comprehension. In 1914 the revenue per head was $21.12; in 1920, according to the first figures given to me by -my hon. friend-which would have to be enlarged a little now-the revenue per head was $36.11.
As I said, if we had only the revenue side to look at, that would indicate great progress and flourishing finance; but when we turn to the expenditure side we find a

pretty serious state of affairs. The total expenditure in 1914 was $186,241,047.63. When I speak of total expenditure, I am disregarding the question of the consolidated fund or capital expenditure or anything of that sort. It is what Mr. Mantalini calls the "demnition" total, and that is what we have to provide for. So I am merely presenting the total. As I say, the total expenditure in 1914 was $186,241,047.63. When I come to the total expenditure for 1920 I have another difficulty. My hon. friend to-day said, I think, that his estimate of the total expenditure for 1920 was $556,000,000. Could my hon. friend tell me from memory whether that is correct?


Henry Lumley Drayton: I am afraid I cannot.


William Stevens Fielding: I took the figures down at the time. But I am now confronted with this difficulty, that the previous statement which my hon. friend was kind enough to furnish me, in connection with a return I asked for, placed the total expenditure for 1920 at $675,125,000. That is the amount contained in a return presented by the hon. minister, and which he gave as the estimated total expenditure for 1920. My hon. friend's statement to-day shows a large reduction in this amount. While I was glad to find from 'his figures that there has been a great increase of revenue, I should be equally glad to find that he has a diminished expenditure, but again I have had to make a few calculations based on the figures he gave before. So $675,125,000 I take as the total expenditure for 1920. Converting that into expenditure per head for simplicity of understanding, we have this result, that in 1914 the total expenditure per head was $24.11; in 1920 the total expenditure per head, according to the figures previously given to me, would be $75.01.
Now, that is a contrast which should make our people think for a moment. If we had in 1914 before the war what we thought a large expenditure of $24A1 per head, and to-day we are expending $75 per head, that is a very striking comparison which should suggest to every Canadian the gravity of the situation.
Let us turn now to the extent of the debt.
I take the gross debt of 1914 as stated, at $554,391,368.86. The population, as estimated at that time, was 7,725,000. So that works out the gross debt of 1914 at $71.75 per head. We have no absolute close estimate of the population to-day, but I under-159i
stand for all practical purposes the officials of the Government are treating it as around 9,000,000; and we shall all be delighted to find that is correct. Taking that as correct, the gross debt of 1920, the year just closed, according to the figures supplied to me in the return I have referred to, was $3,014,483,774.12, which works out per head at $334.90. Again I ask the House, but still more I ask the country, to note those figures,-that in the year before the war our gross debt per head was $71.75, while it is now $334.90. That is an immense debt, and surely reflection on these figures will make us all realize the gravity of the .situation.
I come now to the net debt. In 1914, with a population of 7,725,000, our net debt stood at $335,996,850.14, or $43.49 per head; turning now to 1920, and taking our population at 9,000,000, we find that the net debt is placed at a little less than two billion dollars-$1,935,946,312.85, or $215 per head.
Let us reflect a moment on those figures. In the year 1914 we had a net debt of $43.49 per head. What did that represent? How did it come about? We had the accumulations of debt from the older provinces before Confederation; we had all of the various public works that were carried on through the fifty odd years of Confederation; we had built three transcontinental railways; we had immense outlays in connection with our canals and other public works; we had built extensive terminal facilities, for we had been carrying on down to 1914 what was regarded as a big progressive policy; and as the total of it all we found that we had rolled up what was considered the large net debt of $43.49 per head. But if we make a comparison of it with the net debt now, we find it has advanced to $215 per head.
Again, I say my only purpose in making these comparisons is merely to awaken, if I can, in the public mind a keen sense of the real seriousness of the situation. I do not use these comparisons for any party purpose or for any alarmist purpose; I use them simply to help my hon. friend the Minister of Finance to bring the country to realize the seriousness of our financial position.
When we talked of our debt in days gone by and up to a recent period we usually spoke of our net debt as the real measure of the obligations of Canada. We ascertained that net debt by taking the gross debt-all obligations of every sort, deducting what we called our "assets," and striking a balance, which balance

was called our net debt, and that term has been generally used by all our public men to represent the real debt of Canada. I was glad to hear my hon. friend the Minister of Finance frankly point out to-day that we cannot rely on that statement of net debt as telling the whole story. Our assets have at all times contained some items to which, on careful examination, exception may be taken; but while our assets did not bulk very largely that perhaps was not of so much importance. However, our assets, according to the latest returns, have gone from about $77,000,000 in 1899, or about twenty years ago, to the immense total of over a billion dollars to-day, and when they run into such big figures it becomes necessary to give them a more critical examination.
I am glad the Minister of Finance looked at the matter frankly to-day. I had a statement made as to the earning power of those assets for a series of years, and the interesting fact was disclosed that the earning power last year was higher than before. That struck me as rather remarkable, and naturally I made some further inquiries. The explanation is that at present there is a large item in the shape of the debt due from the British Government, which is actually a sound asset, and on which the interest is computed. But that is an entirely temporary affair and will be closed out iv a short time, when we shall have before us what may be called our statement of assets. But that ordinary statement of assets is becoming weaker now by certain factors *to which attention was ealled to-day by the Minister of Finance. These assets, so called, include the obligations of railway companies which have paid no interest, and from which we can expect no interest. Indeed, here is a specimen. When my hon. friend dealt with the same point to-day I think he quoted from different data. I find among interesting specimens of our valuable assets what are described as Grand Trunk Pacific loan account, $51,000,000; and my hon. friend gave as of a later date a larger sum; then there is another item, the Canadian Northern railway, $108,000,000, and I think again my hon. friend gave the figures as of a later date and a larger sum. These are not assets that we can count upon getting much from. I have heard of a man who gave a note of hand and when he had signed it, he said: "Thank -God, that debt is paid." We are doing a little better than that in this statement. We are giving our note of hand, for that is what the Canadian Northern Rail-[Mr. Fielding.!
way Company is doing and we are the Canadian Northern Railway, and we are not only saying "Thank God, that debt is paid," but we are putting this amount in a statement of assets and saying that it goes to reduce our obligations. I am glad to know there is no difference between the Minister of Finance and us in that regard. One of these days there will have to be a revision of that balance sheet and we shall probably not differ as to what will have to be done. I mention these things merely to show by sharp contrast the tremendous change that has -taken place in the short period between 1914 and 1920.
With all the economy that the minister can manifest, with all that he has manifested in his present estimate, and with all -that he is likely to manifest in -the future, a very serious financial situation will still confront us, and it is well that we should understand it, face it, grapple with it courageously, with a conviction that the mass of the people in some shape or form have to provide the vast sums of money necessary for the carrying on of this increased burden.
My hon. friend has presented estimates for the comin-g year, which estimates are certainly very large. As he has pointed out to-day, they show a considerable reduction from the estimates of the previous year, and I am sure that if he makes a comparison between the sum which he is asking for and the sum which he was asked for by the various departments, he would be able to show a very much larger diminution, but, he has made an effort in the right direction. I think there is one thing we could do to help the minister in this matter. We ought to stand between -the minister and our constituencies in these demands that are made u-pon him. Economy is a fine word to apply to your neighbour's constituency; it is not a very pleasant word to apply to your province or district. I read in a newspaper the other day a long article which was piously calling on the Minister of Finance to exercise the widest, the most careful economy, and in another part of that paper I found an article which demanded the immediate construction in that community of public works which would cost many millions of dollars. We are all prone to do that sort of thing; we are all apt to be advocates of expenditure with respect to the -district from which we come, and I want to say frankly that every membeT of the House, in face of this situation should help the minister by telling his constituents plainly that -many of the things they ask for, good,

useful though they may be, are not of the most urgent character and ought not to be pressed upon the attention of the Government at this time. We all owe that to the minister and we should give him that help. But we must ask him to be fair; if modest applications in one region are refused and those who are interested, in them and who are refused, discover that very lavish expenditures are going on in some other direction, there will naturally be discontent. The minister, his colleagues, supporters and friends should be willing to adopt what I may call a self-denying ordnance in these matters and see that we practice a real policy of economy, so far as such is possible.
Canada cannot stand still, we are living in a progressive age; there are urgent things which will come before the Government; there are public services which must be rendered ; but I want to ask the minister to see that in the various demands that are made upon him only those that are necessary and that are not only meritorious in themselves, but of the most urgent character, shall receive the benefit of his approval. There is no other way by which we can better the unhappy condition which exists; there is no royal road out of this present trouble. The solution is national economy and individual economy and only by those means can we hope to meet the difficulty, and I trust my hon. friend will be supported in every legitimate effort he makes to that end.
The minister stated to-day-and I was glad to hear him state it-that his hope and expectation is that during the coming year he will be able from his revenue not only to provide for the ordinary expenditures, but to take a substantial step towards paying off the public debt. We should make such an effort even though that involves heavy taxation; we should endeavour to grapple with the question as it was grappled with the other day by the Chancellor of the Exchequer in England who said that they were preparing immediately to make a long step towards paying off the public debt.
The tariff question is always with us; it figured in the discussion to-day, being mentioned by the minister towards the close of his address. While it is true that at all times for many years all our tariff discussions have been more or less tinged with the question of free trade, there has of late been a revival of what I may call the free trade movement, and the free trade question is now thrust to the front of our
tariff discussions in a larger way than it has been in recent years. That, I take it for granted, is because our farmer friends attach so much importance to the matter and have pushed it into their platform. With all due respect to them, I take the-view that free trade is not a practical question in our tariff discussions of to-day. There are some things that we should dowell to remember. In the first place, it may be well simply to remember that there never has been in the Dominion of Canada such a thing as free trade. There is not anything of the kind now, and with all due respect to those who may be described as extreme free traders, I think it is no wild guess to assert that there will be no absolute free trade in Canada within the lifetime of any man who sits in this House to-day. It is not practicable, and that is not to say that free trade principles are not sound.
If I had to engage in an academic discussion on the question of free trade versus protection, I would hold up my hands for free trade. I think free trade-I say this reverently-is part of the divine order of things; at all events, it is part of the law of nature. I say this reverently. In all parts of the universe, an all-wise Creator has given the capacity to produce something which, properly understood and developed and handled, will minister to the comfort of the rest of the world. The icebound region of the North has its mission no less than the warmer lands of the sunny south. In every section of this world, there is some wealth; it may be hidden, but it is there. No land was ever created by an allwise Providence without having some purpose. I believe it is part of nature's intention that man shall discover, develop and utilize this wealth in every section of the country for the carrying out of the great work of civilizing the world. That is free trade. But it is quite possible that the best of principles may be carried too far; it is quite possible that men who believe in the general principle of free trade must recognize that there are conditions under which it cannot be applied. There is great merit in that statement, hackneyed, you may call it if you will, which is often credited to Grover Cleveland: "It is a condition and not a theory which confronts us." If we were the men of the Mayflower just landing at Plymouth, or the men of the grand army of Champlain pitching their tents at Annapolis Royal and Quebec, we might be able to have free trade. But three cen-

turies have passed since then and many things have occurred which restrict the freedom of those days, which make it difficult if not impossible for us to-day to carry out to the full extent the principles which we may cherish.
I am going to ask my farmer friends and my free trade friends-because I know I have been criticised sometimes during my tenure of office as a minister for not following out as rigidly as they would desire the principles of free trade-to let me take a couple of cases by way of illustration of what I may call exceptions to the free trade rule. I am going to take a couple of cases within the experience of the Government of which d was a member, cases for which I am largely individually responsible, cases for which I know I have from time to time been criticised by many friends who pressed the doctrine of free trade further than I would. Let me take first the question of the anti-dumping law, which is a radical departure from free trade principles. What is the anti-dumping law? It is a special duty to be applied in certain circumstances with a view of keeping goods out of the country, and that is certainly not free trade. Manufacturers would come to the Government asking for an increase in the tariff, and we would ask them to show us reasons, and very often they would say: "Well, we could do very well under the tariff, you know, but our American neighbours have a dumping system; they will at certain times send over their surplus goods and sell them here at .any sacrifice price and destroy our business." The thorough going free trader, the man who is more thorough going than I am on that question, would say: "All right, send the goods along; the more the merrier; if they are willing to send in goods for less than cost, thank them for that and tell them to send along some more; cheapness is everything." That is the view of many of my free trade friends. I pointed out to the manufacturers that this dumping condition w.as after all not a continuing condition but one which, according to their statement, would arise from time to time. I pointed out to one of them: " Don't you see that when, you ask us to give a large increase in duty you are creating a machine which is to be of a permanent character in order to deal with an evil- if it be an evil-which is of but a temporary nature? From our point of view, you are going to penalize the people of Canada twelve months of the year to meet a difficulty that may arise once or twice, or perhaps thrice,

in the course of a year." I thought that that was a fair stand to take in objecting to the manufacturer's attitude. I had a call one day from a manufacturer who informed me that he had no complaint in regard to the tariff. He said he was satisfied with it and as a matter of fact was doing fairly well in- his business. Indeed, he said, he was contemplating an expansion of his business, -and he felt that in view of the large trade he was then doing and the larger business he was planning to do in the future he could afford to sell to the ulti mate consumer at a little lower price, and so he had scaled down the price of one article of importance in which he was dealing. I remarked that that was gratifying, but he said:	"Wait a moment, I
want to show you a letter I have;" and thereupon he placed on my desk a letter written by an agent of an American manufacturing concern which engaged in making in the United States a similar commodity to his and shipping it into Canada. This agent wrote to the man of whom I am speaking:	"Why do you cut the price?
You can just as well get the larger price and there is no reason why you should not. If you reduce your price we will have to reduce too. We will meet your reduction and we will do more than that; if you .are going to start reducing prices we will meet you and keep on reducing, and no matter what price you name we will cut below you." Ah! that was a new light upon the question of dumping. Again, I suppose my free trade friends would say, " All right, let him send his goods in; let them come in; so much the better." Well, if we could have got a bond from those manufacturers in the United States that would compel them to send their goods forever at sacrifice prices it would have been an excellent thing to have adopted the course suggested in this hypothetical quotation. We could afford to close our Canadian factories and buy American goods if we could have got a bond from across the border guaranteeing us their goods for all time at a sacrifice price. But who imagines that the American had any intention of doing that indefinitely? His avowed intention was to cut prices and sell at a sacrifice just long enough to close the other man's business. That was the clearest thing in the world. My manufacturing friend visiting me asked me what he was to do. I said to him: "'What do you think of the situation yourself?" He replied: "Well, I suppose I have to go back to the old price or shut

up shop;" and I told him that I could not blame him; I said we would have to think the matter over. We did consider the matter and the conclusion we came to was embodied in the dumping duty. We came to the conclusion that if big manufacturing concerns in the United States could come here and close up Canadian manufactring interests it was right that there should be a special duty to meet that condition. It was considered by some as a piece of freak legislation, but I am glad to know that it has been copied in other countries, and the present Government have paid us the compliment of continuing it on the statute book. It is the law today.
And if my extreme free trade friends ever came into power I think on due reflection, they would make up their minds that it was the part of wisdom to keep the dumping duty to apply to special circumstances whenever the evil was found that called for its application. Now, I do not believe that my free trade friends will be persuaded even now that I am entirely in the right, but it is only fair that we should ask them to consider some exceptional circumstances, in which men who believe in the general principle of free trade may very possibly agree that some departure is. necessary from the broad doctrine they hold. Take another case in which I know our Government have been criticised-a case in which I know I have been criticised. I am going to consider the question of iron and steel bounties, and I shall do so without the slightest reference to any present question which may be in contemplation. If any one has any bounty claim afloat now I know nothing about it and I have no desire whatever that anything I say now shall be construed as being intended to bear upon any question of bounty, current now, or hereafter to be raised. Bounties on iron and steel originated with the Conservative Government in the days of Sir Charles Tupper. The operations under them were not large. There was a small operation in the province of Quebec and another in the province of Nova Scotia. I have not' the figures but I think no very large sum was paid out until after our Government took up the question. When I was Premier of Nova Scotia a question arose regarding the' operation of the coal mines of the province; there was a feeling that the coal mines, which were natural resources, should contribute largely to the revenue. The Government informed the-managers of the
companies that the royalties would be increased, and the managers complained, alleging that business would not stand it and that mining could not be carried on. They said we would ruin their business. No doubt they were sincere. We were able to come in contact with an American gentleman of great business enterprise, Mr. Henry M. Whitney, of Boston, whom I regard as a benefactor of Nova Scotia, and we were able to induce him to take up the enterprise of consolidating a number of these companies. That is a merger, I imagine some one to say; and mergers, I know, are not popular. But there may be good, and there may be bad, mergers. In this case we were able to induce that enterprising American gentleman to arrange to consolidate a number of mines. We made some changes in the mining law, costing the Government nothing, and gave that gentleman facilities to carry on his work; and in consideration of those facilities we required that he should pay not only the royalty then imposed, which the other men could not pay, but even a higher rate. The other men complained of a royalty raised from cents per ton to 10 cents. VVe required Mr. Whitney to pay cents. That arrangement was the means of starting the development of the coal business down there. Soon after that business got established it was my lot to come to Ottawa, and shortly aftrward, Mr. Whitney came to Ottawa to interview our Government. He made representations as to what he had done to organize the coal industry of Nova Scotia, and he said that he could build up a steel industry on top of that if he had assistance. He stated that he had great faith in that enterprise, but he represented that if he had to obtain capital he must have inducements to bring in other men. In short, he wanted some help from the Government; he wanted a bounty. At that time-and even before and since-there was a good deal of talk about assisting infant industries. Now, I would be always willing to help an infant industry if I were sure that when the infant grew up it would accept the full responsibility of manhood; but when it grows up and begins to knock the old man around the house and feels that it controls the whole thing I think the case is different. I repeat, I would willingly help an infant industry, and as between protection and bounties, I think I would prefer the bounties. Why? When you give a bounty you know what you are giving; every one sees it, and if you don't like it you can stop it.

But if you increase a duty there is often great dispute as to what is its effect. At all events, we were willing to aid Mr. Whitney, with this proviso: We said that we would not help him if he insisted on bounties as a permanent thing, but if he was prepared to accept them for a short or a moderate period, with a distinct understanding that they should be gradually reduced, and wipe themselves out, there would be reasonable ground for considering his proposition. He acquiesced in this view, thereupon the bounty scheme was adopted on a sliding scale for a period of years. After several years we checked the slide and gave them a year or so longer. At all events the time came when the bounties automatically ceased, and to-day no bounties are paid. What was the result of that? Was there anything in the result which wouild justify that departure from free trade principles? I am afraid my farmeT friends will not agree, but I believe it is susceptible of proof that every dollar that was paid out by way of bounties on iron and steel, and millions were paid out, came back to the Dominion treasury in the form of excise and customs duties on the new business created as the outcome of that policy. I think that can be established as a pure financial question, but there is more than that. There has been the making over of Eastern Nova Scotia. What happened? Let me take first the statistics of the coal trade. In the twenty years up to 1893, 'before these transactions to which I refer began, the increase of the coal output in Nova Scotia-not the total output-was 604,000 tons. That was before the days of Mr. Whitney's operation in coal, iron and steel. In the twenty years which followed, from 1893 to 1913, the increase was not 604,000 tons, but within a few tons of 5,000,000 tons. That was the increase in the coal trade under the operation of the scheme to which I have referred. If there were nothing more, surely that is some vindication of what I considered an exceptional circumstance. But there was more than that. Small villages down there developed into towns, and towns developed, shall I say, into 'cities. Nova Scotia is no longer a province of one city. Where the little town of Sydney of 2,000 or 3,000 population existed, there is to-day the splendid city of Sydney with 25,000 people, and in the neighbouring towns and villages the same story is told. There is the town of Glace Bay, big enough to be a city. On the other side of Sydney harbour, you have the towns of North Sydney and Sydney 
Mines, both flourishing towns. The whole eastern part of Nova Scotia was virtually made over under these new conditions. And not Nova Scotia only. The benefits of that transaction extended to the neighbouring province of Prince Edward Island, to New Brunswick, and even to some parts of the province of Quebec, and possibly to some parts even farther away. I do not want to insist that these departures from free trade are absolutely right, but I put them before my friends who are extreme free traders, as facts which I believe can be sustained. I believe they justify a departure from free trade principles under certain conditions. If those conditions can be limited, if we can get anybody to start any new industry under the circumstances under which these were Started, then I think myself that would justify a departure from the abstract principle of free trade.
The tariff question continues to be a large one. It is going to be the biggest question, I suppose, in the next campaign. What, then, is a sound and sane and sensible and safe tariff policy for Canada? To what quarter shall we look for such a policy? Not, I am afraid, to the Conservative party, even when they state their case in a camouflaged way, as my hon. friend the Minister of Finance did at the conclusion of his speech 'to-day. He gave, if I may say so without offence, what seemed 'to me to he a fine example of steering north by south. At all events, we know that the historic policy of the Conservative party is a policy of protection, and protection for protection's sake-a policy of high tariff for the sake of the tariff. Without arguing on .the merits, though I know that a great many of our best citizens believe that that is a sound policy, I am going to be content with saying that the trend of public opinion is not that way, and I do not believe it is any use to look to my Conservative friends for a sound tatriff policy. Where, then, shall we find it? Not from my Conservative friends, not even from that .section which my hon. friend the Minister of the Interior (Mr. Meighen) represents. (He has on several occasions lately spoken of a moderate tariff. Moderation is always a good thing. In nearly all things it is wise to be moderate, but the meaning of the word "moderate" depends largely on the viewpoint of the man using it, and I am afraid that if my hon. friend were permitted to frame a tariff which he would call moderate, it would be deemed very immoderate by some of my hon. friends

who sit further down the House. So I do not expect we can get a sound and safe tariff from him.
Where, then, are we going to get it? Shall we get it from the platform of our farmer friends? Sir, I do not think their platform if carried out would give us the sound policy which I desire, and I hope to be able to show them-at all events I hope they will find that it is wise to modify some of their views. Much in their platform is entirely in harmony with the views I am prepared to support, but I rather think they press the doctrine a little, too far. I am less alarmed than many are about a farmer government. I do not think the country would suffer dreadfully if my farmer friends were to come in and form a government in this country. I know that if some of their views were pressed, they would make some trouble, but the farmer is not a dangerous man. His associations with the soil, whether it be as owner or as land-worker, create, shall I call it, a natural conservatism-with a small " c." He is naturally a conservative in all business matters. He is going to stand for law and order. Now, responsibility generally sobers men, and I think if our farmer friends came into power in all probability they would modify their views a good deal and would probably be able to carry on government with fair satisfaction. But is there any likelihood of that? My hon. friend from Assiniboia (Mr. Gould) made a speech the other day at one of the outlying towns, I forget where, in which he said that the farmers had no expectation that they would come into power at the next election, but they did think they would have an increased body in the House. I think that is a fair guess; I think he was right. If we had a general election right now, some things are not clear, but I am afraid if there is anything clear, it is that my hon. friends on the Treasury benches would be soundly beaten, and I rather think they believe it themselves. But it is not quite so clear to me, as to some of my hon, friends around me, that the Liberals would be in a position to control the House. There will be a large farmer party. I think the Liberals would be the largest group in the House. They might even have a majority, but I am troubled by the thought that they would not have a large enough majority to carry on the Government. Our farmer friends say they do not expect to win, but that they do expect to come here in increasing numbers. What for? Two years ago in a discussion in the House of Commons I ventured to suggest-I do not presume to offer advice-to my farmer friends, that so long as they pursued a policy of isolation they could not expect to accomplish much. Well, much water has gone under the bridge in two years. The Farmers' party is larger and stronger than ever, and it naturally feels less willing, I suppose, to look at things outside of its own political platform. Nevertheless, I am going to suggest to my hon. friend's that if they want to do any constructive work they cannot do it by a policy of isolation. They can be a strong party, a critical party. They can make an opposition, but there will be no need of their opposition. If I am mistaken in my view and hon. gentlemen opposite come back to power there will be a strong opposition over here, you can make up your mind about that; and if hon. gentlemen on this side of the House move across, I am willing to admit that there will also be a strong opposition in the House by my hon. friends opposite. Therefore, it will not be necessary for the farmers to create an opposition; there will undoubtedly be one. The farmers want to be constructive. I do not believe the farmers of this country, earnest and sincere as I know they are, want men in the House merely for the purposes of faction. They have ideas and they want to do things, but so long as they stand alone they cannot accomplish their aims. I therefore hope that events will so shape themselves that these gentlemen will find it their duty to associate themselves with some other men in the House who, though they may not go all the way with them, will go quite a long way with them.
While I would not fear dangers from a Farmer Government, I do not think myself, as things are going now, that we can look to that party for a sound tariff policy so long as they stand alone. What then? I do not even think we can expect to get a sound and safe tariff policy by a too rigid adherence to every line and every letter of the Liberal tariff platform. I think myself that we will find that we are all prone in framing platforms to put things perhaps a little more strongly than is wise and we all find when we come to the responsibilities of office that we may have to modify our views. If we are to get a sound and sane tariff policy where shall we look for it? Where shall we find the guide posts which shall direct the people into right lines at this time of trial?
Turn back to the policy of 1911, the policy of the Liberal party, the tariff as it stood

at that day, with the amendments that weie contemplated when they went out of power, and in this you will find the elements of a sound and sane tariff policy; not the finished edifice but the ground work and the frame work of a sound tariff policy. Some conditions have been changed since and we will have to meet them, but I believe that if men will look back to the policy of 1911 as it stood at that time, and to the tariff of that day plus the proposals that were then being put forward, they will see that they can accept it as a basis, as the ground work, the frame work, of a fair tariff, although not the finished edifice.
But some people will say: " That is the National Policy." My Conservative friends are much given to the practice of saying that the Liberal policy isthe National policy, and once in a while an unthinking Liberal is found who will listen in silence to that retort. The Liberal policy of 1897 was not the old National Policy, If you want evidence of it turn to the records and you will find that the Conservative leaders and the Conservative press denounced the Liberal policy of 1897. It was not the old National Policy. They said it was going to tear down and destroy the old National Policy. But as the years rolled on and as they found that policy was winning success and the country was prospering, they swung around and said: " That is our policy."
Let nie picture the situation as seen on a race course, say, at the hospitable city of Toronto, when the Ontario Jockey Club is preparing for one of the great events such as the King's plate on the 24th May. There are two horses entered, a Liberal and a Conservative. The bell rings and the horses eome to the stand. The owner of the Conservative horse says: "Judge, you are not going to make my horse run against that animal; he is not in our class; take him out; I will not permit my horse to run a race against a poor, miserable, spavined, knocked up thing like that." But the judge says: " This horse is entered for the race and you have to run against him." They start the horses and in twenty seconds time there is a considerable space between them. The Liberal horse pulls out in front and as they speed down the back of the course is seen to be far ahead. He increases the lead and as they come around the track he is found to have left the other far behind. Finally the Liberal horse crosses the line a winner and the other is left away back in the distance. What does the owner of the Conservative horse do? He rushes out and says: " Do not give the prize to that 
fellow; that is my horse that he is riding; that is a splendid horse!"
That is about the attitude of our Conservative friends when they talk about the Liberal policy of 1897 being the old Conservative National Policy. You can prove that it was not the old National Policy by taking the facts and figures during the period of the Liberal Government. Taking into account the actual savings in customs duties and comparing the duties paid then with what would have been paid if the old tariff had been in force, and taking into consideration the savings that were made by the reduction in the prices of home manufactures, you will find that the change made represented hundreds of millions oi dollars in the pockets of the people of Canada. It was not the old National Policy. It- was the policy which made this country grow and prosper. For many years we were able to look back with pride and satisfaction to the results which followed the adoption of that policy. What were those results? I do not want to dwell too long upon this point because I want to hasten to a conclusion, but I am going to call a witness to testify as to the fruits of that 9 p.m. policy, and as to the situation that we turned over to the Minister of Finance of that day, now the hon. the member for Leeds (Sir Thomas White). We left him in the happy position that he could bring down to Parliament the last volume of .the Public Accounts that were not ready when we went out of power, showing a surplus for 1911 of $30,000,000. We left him an overflowing treasury and a fiscal system which, being allowed to continue for another year, placed him in the happy position of coming down to Parliament with a surplus of $38,000,000. We left him, I repeat, with an overflowing treasury. What was his testimony as to the condition of the country generally? ;I am going to ask you to listen for a moment to a statement made by my hon. friend which appeared in his Budget Speech of May, 1912. My hon. friend had the pleasant duty of describing the condition of the country then as my hon. friend the Minister of Finance of to-day (Sir Henry Drayton) has had the duty of describing to-day. He was talking not merely of incidents of Government but he was describing the condition of the country as it was at that time when the Liberal Government had just gone out of power. What was the condition of Canada? I quote from the Budget Speech of Sir Thomas White in 1912:

It will, as I have said before, be gratifying to all that the material prosperity with which we have been so highly favoured still continues to be our portion. Despite the serious vicissitudes through which the western wheat crops has passed and the unusual heat experienced in the province of Ontario during the past summer, the field crops of Canada show a bountiful yield and with the high prices prevailing for practically all its products the great basic industry of agriculture continues in a flourishing condition. Almost every department of trade and commerce shows expansion. Our mines are wonderfully productive. Our *coast fisheries, notably the Atlantic, have enjoyed a good catch and high prices. Our manufacturers are thriving and new industries are springing up throughout the whole Dominion. Railway construction, especially in the west, proceeds apace, preparing a way for settlement in districts not yet opened up and for trade with other markets than we now enjoy. Our increased bank deposits, clearings and circulation, the amount of public and private building evidenced in municipal and business structures, extensions to manufacturing plants and residences in almost every part of the country, all attest that the general prosperity of Canada at the present time is very great.
Our Dominion continues to be the land ol hope and promise to the home seeker. During the last year, as before shown, our immigration from Europe and the United States reached an average of nearly a thousand a day, bringing their capital, their intelligence and their energy to assist in the great task of developing the resources of Canada and building up her nationality. Much has been said in the past with which I am in accord as to the selection of immigration as far as possible with an eye to the quality and character of our future citizenship. Notwithstanding the large stream of immigration, labour conditions are good and extreme poverty, from any reason other than incapacity or direct misfortune, is hardly known.
Under the favourable conditions which 1 have described, and with every prospect for their continuance, the future of Canada looks bright indeed. In the enjoyment of peace, plenty and prosperity her energetic, loyal and patriotic people look forward with hope and expectation to an ever great and greater future.
That, Sir, is the story of fifteen years of Liberal fiscal policy as described by my hon. friend: fifteen years of peace and plenty, fifteen years of blessed peace, fifteen years of joyous plenty, fifteen years of splendid progress, fifteen years of wonderful prosperity! Let us frame and glaze this statement; let us post, it on the walls of the country; let us frame and glaze it and put it into every household, and office and factory, so that men may look upon it and say, "Ah, yes, that is the story of the good old days. Pray Heaven that it may come back again."


An hon. MEMBER:: And come back pretty soon.


William Stevens Fielding: The Minister of Finance to-day gave us some tariff changes which we shall be better able to understand when we read them in detail in Hansard. Let me
say, however, that I am sure there must be deep disappointment on the part of a great many members of the House who were, or are, supporters of the Government, to find that the tariff reform which they are getting-if you call it tariff reform-is of such a moderate character. We must not forget that the Government have for the last two years been, shall I say, coquetting with this tariff question, jollying their friends along and promising that something was going to be done. If I might use a quotation :
" They promise, prepare, propose, postpone,
And end by letting things alone."
Last year the Minister of Finance gave us a very positive assurance that there would be a tariff inquiry in the interim, and a tariff reform measure at the present session-a measure of general tariff revision. If the Minister of Finance is not able to make that tariff revision he is, of course, disappointing his friends; but I think there is another reason why we should have a larger measure of tariff reform than we are getting. There is unrest in this country to a degree which must be disturbing to us all. There are various causes for that. Part of it is world-wide; some of it probably might be dealt with in a better manner. There is a widespread opinion in the country-with that portion of the community which is easily susceptible to, shall I say, the movement of unrest-that the Government and Parliament-we may as well count ourselves in-are not doing much to meet the situation. The high cost of living is pressing upon people severely. It presses on all classes. Those whom we for convenience call the working class-although we are all members of the working class in Canada-those whom we speak of sometimes as the working class have been able to protect themselves in some degree 'by the increase in wages which they have obtained, although I think there are few cases in which the increase in wages has been equal to the increase in the cost of living. But there is a very large class of unorganized working people in Canada who are feeling this pressure very keenly. The clergymen, the public school teacher, the college professor, the clerk in an oflace -who is paid a fixed yearly salary and not wages by the day-a large class of people- and the Civil Service may be included in the number, although they have received some little aid-but there is a large unorganized class of people in Canada who feel the situation to-day regarding the cost of living very, very keenly, and they do

not say much about it. They are the class of people who bear their burdens and say nothing about it. For the sake of these people, and for the sake of others, I think it is a pity that we do not make some effort to show them that we are doing something -or at all events trying to do something- to meet the difficulty. What have we done? We have appointed a Board of Commerce. We had a committee last session to inquire into the high cost of living. That committee worked hard, and I am quite sme had every intention of doing something; and in the end the committee, in part, and certainly the Government, got to be panicky, and suddenly they resolved that they would pass this Board of Commence Act. They were warned that a measure of such importance, rushed through in that way, would probably get them into trouble. However, they felt 'that something must be done and so they rushed the legislation -through. What has happened? They appointed three able men to the board, and I have no doubt these gentlemen sincerely desired to do the best they could. But what has happened? The board has been paralyzed almost from the beginning. I think at the start the fact that such a board was in existence had a tendency to check profiteering,-if there ever was a tendency of that character-but before the board got very far it found itself paralyzed. Doubts arose as to whether it had the power to do anything. In the most important step it ever took it was immediately vetoed by the Supreme Court of Canada; and today a case is before that court asking the court to tell the board what their powers are. The chairman of the board resigned some time ago, and the members of the Government are permitting the paralysis to continue. They are afraid to appoint another chairman, and the board is doing next thing to nothing. I am sure the members of the board desire to help all they can, but whatever the cause may be the public at large do not feel that relief has come. Now we think that something should be done-some effort should be made even though it be not very successful. I think that something should now be done in the way of reducing the tariff upon the necessaries and the comforts of life-some of the things which the average man requires from day to day. I do not overestimate the value of tariff reductions in affording relief from the high cost of living, and the people may expect too much therefrom. There is a curious thing about tariff taxes. Increased taxes always reach the consumer the next morning. If my hon. friend were 
to-day to add five cents a pound to the taxation on sugar every shop-keeper in Canada who gets a newspaper would tomorrow morning add not five but six cents to the price. That would reach the consumer instantly. But when tariff reductions are made it is a slower process. Then the shop-keeper says, "You see I had to buy these goods under the old tariff, and I cannot reduce the price." The process of reduction is slow; the process of increase is rapid. Therefore I grant if you make tariff reductions now you may not get as much relief from them as perhaps is desirable. I do not overestimate their value, but I think it would be desirable that an effort should be made; and in doing so, at all events, we must give to the country some assurance that we are trying to meet the difficulty. I think we are doing less in this direction than has been done in Great Britain, and less than has been done in the United States.
I therefore conclude my remarks by moving, seconded by Mr. King:
That all the words after "that" to the end of the question be omitted, and the following inserted instead thereof:
"the Minister of Finance, in the Budget Speech, in the session of 1919, gave assurance to the House that during the ensuing parliamentary recess there would be a public inquiry by the minister and one or more of his colleagues into the operation of the customs tariff, with a view to a general revision of the tariff at the following session.
"That the promised public inquiry has not taken place, and the expected proposals for tariff revision at this session have not been submitted to the House.
"That in view of the continued increase in the high cost of living, of the greatly increased burden of taxation, of the hardship which many of the people suffer from these causes, and the unrest naturally arising therefrom; and in view of the desirability of adopting measures to increase production and effect such relief to consumers and producers as may be within the power of Parliament, the House is of opinion that, pending a wider revision of the tariff, substantial reductions of the burdens of customs taxation should be made with a view to the accomplishing of two purposes of the highest importance; first, diminishing the very high cost of living which presses so severely on the masses of the people; second, reducing the cost of the instruments of production in the industries based on the natural resources of the Dominion, the vigorous development of which is essential to the progress and prosperity of our country."


George Eulas Foster: Mr. Speaker, before going into the subject matter of the remarks which have been made by my hon. friend (Mr. Fielding) who has just taken his seat, I may be allowed a personal allusion. It gave to me personally, and I

am sure to- hon. members on this side of the House, a peculiar and particular pleasure when on the rising of my hon. friend from Shelburne and Queen's he was received with such evident marks of goodwill and approbation by the hon. gentlemen who sit behind him. I allude to this because personally I feel something of the same pleasure which I imagine my hon. friend felt when he received that -acclamation from his own side of the House and evidence of goodwill from this side as well. It is a pleasing thing to the elder brethren in political life who are at a stage a little before their hair completely whitens and the westering skies have closed over their journey that the younger and more vigorous and ambitious elements on both sides of the House seem to have a feeling of fairly deep respect and-shall I say-of friendship towards those who have long borne the burden and heat of the day. And I reciprocate and join in the kindly demonstrations that were made to my hon. friend by both sides of the House when he rose to speak.
I am also greatly pleased with the speech which my hon. friend has made. But before saying very much with reference to that I wish to add to the note which was struck by my hon. friend the Minister of Finance (Sir Henry Drayton) in one portion of his speech this afternoon, and which I would like to emphasize, and if possible, to prolong. It was that note in which he vindicated the fine effort made by -Canada during the five years of the war we waged and upheld in unity and co-operation on both sides of the House in defence of justice, and of -right-principles which have long animated- the British Empire. He called upon that same spirit of co-operation and sacrificial effort to prolong its action and so to unite us in the common duty-not simply the duty of one party or another of the various parties which have their being at this time in Canada-of healing the w-ounds and repairing the waste of war.
The work which is upon us to-day is preeminently the work of Parliament and of the country and not of party or faction. It is the extension and consequential entailment of a war which was our common war and which wa-s upheld by this country in co-operati-on and with a large spirit of unity in -all its parts. The very same spirit, the very same qualities, the very same efforts, ought to be projected into the co-operation necessary, as I have said, to repair the wastage and heal the
wounds of war. What my hon. friend has done in this Budget presentation to-day ought not, I think, to be lost sight of in its general -and broad lines.
Before we get into the discussion of details and travel off into individual paths where we may lose sight of the principles which have been the ground bases, so t-o speak, of the presentment, it will be well to tabulate them for a moment so as to keep them clearly in -mind during the subsequent discussion. And may I say that if we can maintain throughout the debate the spirit which has animated the speeches which have been already made, if we can forget the individual in the general, and forget a portion of the partisan in the patriotic, we will make this discussion memorable in itself in this Parliament and of very great benefit to the cause which weighs so heavily upon u-s for a fair and speedy adjustment of conditions following the war. That spirit has been eminently well displayed to-day.
Now, what are the guiding principles or points, so to speak, in the presentment which has been made by my hon. friend in his speech this afternoon? There is first a laying bare, down to the very bone -and marrow of the truth, just what the condition of Canada is to-day, financially and economically, in its -domestic relations and its relations with other countries. I look upon it as a fine contribution to the discussion which has now . been begun-that there was no attempt on the part of the Minister of Finance to camouflage the position. He was frank, open and truthful in his presentation of our financial and economic condition, and he well merited the compliment which was paid to him by my hon. friend (Mr. Fielding).
There was no concealment of the amount of -debt that this country is now bearing upon its shoulders; there was no -attempt to minimize that burden by counting in assets which were not properly to be considered as live assets; and a distinction was made with a corresponding addition to the net debt that we carry by a diminution of those assets which could not be looked upon as being live assets. We might collect our assets, say under three headings-the quick, the dead and the purgatorial. The quick assets we can very easily pick out, -and there are many of them. The dead asset wfe have picked out and laid aside; we respect it for its -memories and for the associations which it had in the past; but we have laid it away, and we

heavy, though the country has untold unexpected liabilities and obligations which have to be met,-and we intend to meet them, though those liabilities are very pressing and very onerous,-the Finance Minister has stated, what business people believe to be right, and what we around these benches believe to be right,-that foi this year, and if possible next year and the years after,-Canada shall not incur Ifurther debt. We may be obliged to carry for years the debt which we have at the present time, but that we should from this time on, so far as we can, balance our accounts and make our revenues tally with our expenditure. Taking that into account,, the other j fact must also be taken into account, that it is not possible to do everything we would like to do because of the heavy burden oi carrying the war debt of the country,-that $2,250,000,000 of net debt that we have to carry. At the same time, the promulgation of the principle that no loans are to be made at the present time, but that we must out of our own resources meet our own liabilities year after year, is a. great step forward; and if Parliament and the country will stand behind the Government in that declaration and in trying to have it fulfilled, we will come all the sooner to the time when inflation and big debt charges, and all the discomforts and disorganization resulting therefrom, will be mitigated, and gradually iwe will emerge from the mists into the sunshine of liberty and prosperity so far as economic and financial considerations are concerned. I think that is a healthy principle to instil, and a healthy determination to make, both here in Parliament and outside in the country. Let us pay our own way.
Another thing that has been done by the Finance Minister is this: He has made a courageous attempt to devise and to impose methods of taxation which shall help to square our accounts and bring us up to the position to which I have just alluded. I say that is a courageous attempt, and it deserves our support here in this House. It is not popular. As I was passing out to-night I heard a member who does not belong to this side of the House express a view which I am quite sure will be often expressed. Speaking of the taxation schemes of the Minister of Finance he said, " It is going to make the Government very unpopular. There are women voters now, and the Government is not going to gain many of their votes by taxing women's dress and women's jewellery." There, again might- I be allowed to suggest- how my hon.

friends on the other side of the House can help mightily towards the readjustment of things financial and economic? It is in this way. When you visit your constituents do not go back on your promises and principles of to-night and do not say to the electors, as you meet them: " Are you going- to keep that Gov-ernmenit in power?" Do not say to the woman voter: "What is this you have around your neck-a fur? The Government put 20 per cent on that fur. Have you a vote? Then, when the next time for voting comes around don't you vote for that Government or a representative of it.'' Be careful and not stultify yourselves by saying that you will take the duty off if you get in, though you may make that premise with impunity for tlhe prospect is far in advance. But if you do not do that you will greatly assist in bringing about the payment of those dues which are absolutely necessary if we are going to pay our way and reconstruct and readjust our economic and financial affairs. I know it is a courageous thing for the Minister of. Finance or the Government to put on new forms of taxation, but there are some blessed and good features in -the direct form of taxation; and one lesson which cannot be taught too quickly and which cannot be brought home to the people too strongly is that the burdens of the country are to be borne by the country itself and that the people must stiffen their backs and strengthen their courage and double their endeavours in order to bring the country out of the position in which it is to-day to a better economic and financial basis.
Every one must realize the fact that there is a duty to be done, and that it is not by the indirect method, only that it shall be done. We have had two systems of taxation, one almost entirely predominating up to the present time, and that is the method of indirect taxation, by which the people paid heavily and did not know when they were doing so. All sorts of assertions have been made as to the amounts they paid,-assertions which of course would partake of the particular power of imagination of the man who made them and of'his boldness of speech. All kinds of assertions have been made, many of them grotesquely exaggerated; but nevertheless one of the features of indirect taxation is that you pay out not knowing how much you do pay. I doubt if that system of taxation, altogether imposed upon a country, is a good school teacher to that country and does finally eventuate in what is best for the interests of the people. I think that a judicious mix-

ture of the two, by practice made necessary and by practice gradually worked out without too great a wTench, is a mixture that the body politic should be asked to take, and if they will do it we shall place no stamp or excise duty upon the administration of that mixture. So that now we are working up along the line of direct taxation every year a little further, and yet not by too violent advances that would produce-I was about to say a revolution, but that word does not convey my meaning-but a reaction against that principle of taxation. We have now a judicious mixture, I think, of the two kinds of taxation. In our business profits tax, in our income tax, we have examples of the direct method. We add to these now our sales tax on luxuries and other articles. By the methods of taxation adopted we bring it to the mind of the purchaser that this is a tax which is paid by the person himself or herself, and which is not added to by the profits of the middleman, the man between the manufacturer and the retail counter. By bringing this fact home to the purchaser .at the time of the purchase, we adopt, I think, a practical way of inculcating in the body politic a real interest in and solicitude for the good government and economic administration of the country.
I shall not follow that line of thought any longer. These are just some of the views I place before the House with its kind permission. Now I desire to come to the speech delivered by my hon. friend the ex-Minister of Finance (Mr. Fielding), and I hope he will not think, if I disagree with him in certain particulars, that I am at all detracting from my general admiration of his speech. Just on that point let me say that it has been to an eminent degree nonpartisan in character. The hon. gentleman drew a line of .comparison between 1914 and 1920, and he did that with his long experience behind him, not for the purpose of a partisan appeal, but rather to inform the country itself, as a man of his experience and length of public service could well do, to put before them the duties of the present as compared with the duties of the past, the obligations of -the present as compared with the obligations of the past, and to show the sacrifice and effort which would be necessary on their part in the future as compared with the standard of necessity in these respects that existed in the past. That is a good thing to have done, and I congratulate my hon. friend on having done it. He paid a compliment to the Minister of Finance, but it was 160
rather left-handed, in that in paying a compliment to one minister he somewhat took away from .a complimentary reference to another minister. He said that it was easy in war time for Finance Minister No. 1, but it was hard in peace time foT Finance Minister No. 2; and he thought that if Finance Minister No. 1 had had a little more foresight and a little more courage he might not have done some of the things which he did do. Ah! those afterthoughts ! How they plague us, and pursue us, and chastise us; but they never remedy the thing that was done before the second thoughts came. They have no power of salvation for an error or an act committed before they were brought out from the misty depths of thought or imagination and applied in their sober secondary condition. Now, you have to put yourselves in the position the man was in when the thing under consideration was done, and if my hon. friend will put himself in that position I think he will revise his opinion and say that during the five-year period of the war the task of the ex-Minister of Fin-nance No. 1 was a hard one.. He may well say that, in peace times finance minister No. 2 will have a hard task. I have collaborated with both and I think I have a pretty good idea of what has been done by the former Finance Minister and what so far has been done by the present Finance Minister. I do not envy them the work they had to do but I give my tribute, and I give it most willingly and unreservedly, to the able management of the finances of the country by Finance Minister No. 1 during the trying period of the war. There were difficulties which had to be surmounted. Some things were made easy because of the buoyancy of the feeling of patriotism and service which was then at its height. But there were other things that were awfully hard, tremendously grinding, and that worked into the very vital sap of the man who had to bear the responsibility of it and work out in practice and in administrative system what there was to be worked out. But let us give due credit to each.
Afterthoughts! Yes, my hon. friend from Shelburne and Queen's has had afterthoughts. But they did not rectify the errors of the past; his primary action which probably would not have been taken if he had taken time for the afterthoughts. There was a time when my hon. friend- lest he think too. highly of himself I just want to suggest it to him-prophesied' that the Grand 'Trunk Pacific could be bbiilt at a
r.EVISED EDITION

cost to the country of only $15,000,000. After thoughts would have told him that it would cost $200,000,000. It would have relieved him and relieved the shoulders of the present Minister of Finance if my hon. friend had only had after thoughts before he took the action itself. It is just one sample. You can go through the list of all governments, all ministries and even all individuals, and you will find this brooding nightmare of after thoughts coming to plague and pursue them.
What was the position of my hon. friend on loans? I followed him with a great deal of interest and, really, I could not quite follow him. Although years have passed over him, as they have passed over myself, he is yet agile in body and agile in mind and in spirit. And he did skate most scientifically around that business of the loan domestic or the loan foreign. What his idea was it is difficult to say, but I analysed his position like this: Glad in a way that we received a lot of money in our own country when we could not raise it in any other because there was no other country we could go to that would give us a dollar, outside of the United States and they would give us very little. In fact, we had to loan to outside countries instead of borrowing from them. Glad, then, that Canada showed that she possessed such resources that she was able to raise a billion dollars to prosecute the war; yet finding when we come to the readjustment that the money which has been wasted in war is not available in the banks or in the pockets of the people to go into the business and industry of the country, and he moans and bemoans that fact. But there you are; the money was there, the money had to be raised. We raised it and if it was blown away on the battle.	field it is not in the banks to-
10 p.m. day nor in the pockets of the people to put info business enterprises. We must dig up other money, and the way to dig it up is to stop strikes, stop holidaying, stop doing half work, stop wasting, and set ourselves to the business of honest toil and honest production. That is the only way we can replace the money so spent. I wish my voice could penatrate to the heart of every man and woman in this country and impress upon every heart this message and keep it there like the message on a film: "Stop wasting; go to work; produce; stop grouching and grumbling; and we will soon get back to an atmosphere that i,s bright and happy and hopeful.
My hon. friend had something to say about a stock transaction. I am sure he [Sir George Foster.!
would not have said what he did if he bad had the facts before him. I propose to place just the bare facts before him, and these facts are amply proved by the documents and accounts. What did my hon. friend say?
There is one feature which, while well known to the inside circle of finance, has not been made known in any marked way to the Canadian public at large, and I think it is time that the Canadian people knew something about it.
Here we have a mystery. The hon. gentleman's words go out to-morrow morning in the papers and the public will scent a mystery. Something has taken place. The public ought to know it because the exMinister of Finance says it is so. What is this thing? Some more rascality of the Union Government! He goes on to say:
If you take up the last volume of the Public Accounts for the year ending March 31, 1919, you will find a couple of interesting items.
Interesting! The public cocks up its ears again ! A mystery; an interesting mystery ! The ex-Miliister of Finance says so! He had thirty years' 'experience; he had that solemn oracle, the Public Accounts, in his hand, and he backed up his statement with the Public Accounts! What is this interesting mystery?
If you take up the last volume of the Public Accounts for the year ending March 31, 1919, you will find a couple of interesting items. There is a later volume than that, but we have not got it.
More of a mystery, more interesting facts to come out in volume 2! For the time being my hon. friend contents himself with volume 1:
For that year, however, any hon. member will discover in the statement of receipts and expenditures an item called " Bank of Montreal Trading Account "

a very interesting account. Hon. members will read the items therein contained and will discover that the Government paid out on that account the sum of $7,450,000 and got back $5,177,9*04. So oh that account-whatever it means-the Government of Canada-in other words, the people of Canada-lost $2,272,000.
N*ow that is the statement. I am sorry to say, on his own account, that my hon. friend is .altogether mistaken in coining to that eonelusiono and I take the occasion to put the proof before the House so that it may, come out on the wings of the same press which takes that interesting mystery propounded by my hon. friend on its plumage to carry abroad to the reading public. Now, what are the facts of the case? In brief, they are these: That the Government expended $10,950,000 for the whole

completed transaction. It got back out of that transaction $11,074,088,, and instead of losing $2,272,000 it made a gain of $124,088 for that whole period on the bonds of the Victory Loan of 1917. This transaction was closed on September 7th, 1918.


William Stevens Fielding: Will my hen. friend allow me to ask from what public record he is quoting? Where does it appear in the Public Accounts?


George Eulas Foster: It will be found in an Order in Council which I propose to lay on the Table.
Some hon. MEMBEES: Oh, oh.


Mr. TEAHAN:: An Order in Council!


George Eulas Foster: Well, now some hon. gentleman, as I should judge, has expressed a bit of dissent-a little bit of dissent. What do my hon. friends want? Will they take the Auditor General's authority? Will they take the report of the Auditor General? My hon. friend holds up a book, and he Teads from that book two sets of figures, but he makes his own deductions. That book does not show that $2,272,000 was a loss accruing to the country; it simply gives a statement of an expenditure and an income in an unfinished account. My hon. friend's fault was that he did not state what was in that book when he told the people of Canada that this Government has been trafficking and has lost $2,272,000. The latter statement was an inference of his own and it was absolutely incorrect.
An hon. MEMBEE: Another dark secret exploded.


George Eulas Foster: Now my hon.
friend went on to the tariff question, and there I sat in blissful amazement. Looking over the thirty years that have passed and the controversies that have taken place between my hon. friend and myself, and between his party. and the party on this, side of the House I felt almost like saying,, when he had finished, "Now lettest thou thy servant depart in. peace; " and the question forced itself upon me. "Has the tariff millennium come?" The whole party behind my hon. friend never voiced opposition to what he said; they could not; they dared not. They do not like to admit, what in their hearts they know to be the truth-that is repugnant to them; yet if they were all as honest as the ex-Minister of Finance they would get up and say the very same thing. Now, after these confessions-not of an 160J	.
opium eater, but of a virile, experienced public man-rafter this candid confession, let me say to hon. gentlemen opposite: "Do not let us hear anything more of camouflaged assertions ifrom that side as to free trade being the doctrine which is dear to your hearts and embodied in your ipolicies. You cannot put it into your policy now. I do not think you ever meant to put it into your policy to carry out as a reality when you got into power. That was done once before in the history of this country, and the lesson is to be read in the records of Canada. O, don't I know all about it? Didn't I go through all those campaigns preceding 1911 when from the highest authority down to the lowest there was this universal declamation against the principle off protection; that it should be eliminated from the tariff- not be allowed to lurk in corners and by-places, but to be eliminated. To-day what have we? We have the ex-Finance Minister standing for ,an anti-dumping clause-when circumstances require it; standing for a substantial aid to industries-when circumstances require it; standing for mergers-when circumstances require it; aye, and even more, standing for the protected infant industry while it was an infant industry, until it had attained years of maturity; standing for all these-when the circumstances of the case seemed to require it. Where is the free trade doctrine, and

where is-the difference in principle between myself as a moderate protectionist and my hon. friend as a now .avowed protectionist, the principle to be adapted and adopted-as circumstances require if? That was always the doctrine on this side of the House. We never worshipped protection as a fetish; can the same be said by hon. gentlemen opposite with reference to free trade? WTe have always believed that the circumstances of the time should dictate the financial and tariff policy of the time. And my hon. friend's confession to-night has amply justified the policy advocated during thirty years by Liberal-Conservatives in all parts of Canada.
Now, what is t-o be said hereafter to our friends who compose the Farmers' party? Oh, my friend from Shelburne and Queen's is a youthful w'ooer yet; was there ever such a Eomeo? Was there ever such a Juliet, looking out of a window embowered in vines and flowers, for a Eomeo that attuned so sweet a note, so persuasive a love ditty, as my hon. friend has sung to-night? It did my old heart good, and I felt almost like making love to something myself. I

know I never before could have done it as
*well, and wi'th this example before me I unay try yet again. But, alas, for the Juliet, *when it came to that prosaic allegory of the horse race! My hon. friend then forgot the party that he wooed so ardently. The only *two horses allowed on the traok are the Liberal and Conservative. The Progressives are counted out. My hon. friend says to them in effect; you may be good for some *purposes1, tout .when it comes to the real race you are out, you are scratched, there *is no Chance for you.
Then my hon. friend starts off on a quest of his own, it is like the quest of Japhet- in search of a father. Where shall we find the proper policy? IWe cannot find it in the Liberal-Unionists; we cannot' find it in Meighen's vocabulary; we cannot find it in Crerar's vocabulary; cannot find it in Clark's vocabulary. Where shall we find it? And the answer to the weary seeker comes from the member for Queen and Shelburne. " Here is the embodiment of the plan leading to proper tariff policy. I have just repudiated the errors of the past. Come with me, and I will take you to the Promised Land." Jordan and the desert may be between, it is true, but to-night he forgot Jordan and the desert, and was almost in the Promised Land, with the Farmers tagging behind him as beneficiaries of all the grapes of Escol and the other fruits of that delectable country.
I will not continue further and will now resume my seat.


Mr. A. R. McMASTER (Brome):: Mr. Speaker,-


Edgar Nelson Rhodes: Before the hon, member proceeds, I desire to state that the amendment of the hon. member for Shelburne and Queen's (Mr. Fielding) was submitted in my momentary absence from the Chair. A strict application of the rules of debate would demand that the discussion be confined to the amendment before the Chair; but I think it would he most undesirable that we should have a debate upon the amendment, to be followed by a debate upon the main question. I therefore .suggest that it would suit the purpose of the House better to have a discussion general in terms upon the whole question, as would be the case if the amendment were not submitted.


William Stevens Fielding: If you will permit me, Mr. Speaker, I was quite aware of the point, but I understand it has always been the practice in the case of the Budget debate that though an amendment was moved the whole question remained open. It was be-

cause of that understanding I made my motion.


Sir ROBERT BORDEN:: That is my recollection, too.


Edgar Nelson Rhodes: It has been so in practice, but the rule I have stated remains, and it was to avoid any question arising on the point that I mentioned the circumstance.


Andrew Ross McMaster: Mr. Speaker, I intend to make some rather extended remarks upon the subject under discussion, but as the hour is now late and the evening has been full of enjoyment, I beg to throw myself upon the fraternal atmosphere engendered by the remarks of the last speaker (Sir George Foster) and, with the consent of all, to propose the adjournment of the debate.	*


Some hon. MEMBERS:: Go on.


Robert Laird Borden: If my hon.
friend is very earnest in his desire I suppose we should not object, although we should like very much, to. make progress. Perhaps he will be content to go on for twenty minutes or half an hour. But I will not press him to proceed.


Andrew Ross McMaster: Mr. Speaker, there are a great number of resolutions which I think it would be wise for us to look over carefully, and I am going to take advantage of the kind offer of the Prime Minister.
Motion agreed to and the debate adjourned.



SENATE BILL-SECOND READING.

[Stage Direction]
Bill No. 134 for the relief of Albert Graham Elson-Mr. Douglas (Strathcona).
On motion of Sir Robert Borden the House adjourned at 10.20 p.m.
Wednesday, May 19, 1920.
The House, met at Three o'clock.

Mr. J. M. DOUGLAS (Strathcona) moved:: That Bill No. 133 (from the Senate), for the relief of Edith Sarah Bell, be placed on the Older Paper among private Bills for second reading on Friday next.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. FOSTER (York):: 1.	Is it the intention of the Government to take action in the near future upon the report made by the commission which >
is held an investigation on technical educati A ?
2.	Is it contemplated to givt, any assistance to the Toronto Technical Schoc. which is now being used by the Government as a base for the retraining of returned soldiers?


Rt. Hon. Mr. SIFTON:: 1.	Action has already been taken by the passing of thb Technical Education 'Act on July 7, 1919.
2.	For the year ending March 31, 1920, the sum of $36,100 was granted by the Ontario Government to the above school, one-half of which amount will be paid by the Dominion Government out of the funds provided under the said Act.


ERANT MILITARY HOSPITAL, BURLINGTON.
Mr. ANDERSON:: 1.	Has the Government completed the purchase of the Brant Military Hospital at Burlington, Ontario?
2.	If so, what amount of real estate is included with the building, and what was the price paid?
3.	How much was paid for the furniture to the owner?
4.	What was the cost of remodelling and repairs to the building?
5.	How many soldiers have been treated in it?
6.	What is the cost of maintenance per anRi. Hon. Mr. SIFTON:
1.	No.
2.	(a) Approximately acres expropriated ; (b) award not yet made by the court but an advance of $120,000 was paid pending the decision.
3.	$11,465.86.
4.	$349,933.54.
5.	The Brant Military Hospital was taken over from the Invalided Soldiers' Commission on March 25, 1918, and transferred to the Department of Soldiers' Civil Re-establishment on the 31st October, 1919. Between these two dates, 2,562 patients were treated.
IJp to March 31, 1920, 572 ex-members of the Forces had been provided with treatment in the Brant House Hospital as patients of the Department of Soldiers' Civil Re-establishment. There are at present 246 patients of the department undergoing treatment in that institution.
6.	Incidental repairs from 25-3-18 to 15-919, $6,636.44; water, fuel, light and telephone from 25-3-18 to 15-9-19, $20,207.52; total
$26,843.96. Rate per annum approximately $18,000. This hospital was placed under the control of the Department of Soldiers' Civil Re-establishment on the 15th October, 1919, since which date expenditure on account of maintenance has amounted to $14,791,82.


SEED GRAIN ADVANCES.
Air. SINCLAIR (Antigonish and Guys-borough):: How much was overdue and owing to the Government on account of advances made to purchase seed grain for use in the Prairie Provinces on the 31st of December, 1919?


Hon. Mr. BALLANTYNE:: 

QUESTIONS PASSED AiS ORDERS FOR RETURNS.


Mr. WIGMORE:: 1.	What are the names and respective salaries of the employees of the Parliamentary Library?
2.	How many are graduates of any college in Arts of Library Science?
3.	Is it the intention of the Government to make any more appointments to the said Library of persons who have not taken a library science course in some recognized college?


Mr. EDWARDS:: 1.	Who are the publishers of the Montreal Gazette?
2.	What amounts have been paid to the Montreal Gazette Publishing Company for each of the last five fiscal years by the Dominion Government for (a) advertising, and (b) job printing?


Mr. STEVENS:: 1.	What is the total amount of sick mariners dues collected from shipping entering Canadian Ports for each of the years 1912, 1913, 1914, 1915, 1916, 1917, 1918 and 1919?
2.	What amount has been expended by the Government in assistance to sick or distressed mariners during each of said years?
3.	How many officials of the Marine Department in Ottawa have been engaged exclusively on duties connected with collection, distribution and administration of sick mariners dues?
4.	How many officials of Marine Department have been transferred to Health Department in connection with sick mariners dues?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Mines in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Soldiers' Civil Re-establishment in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Public Archives in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Labour in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Railways and Canals in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Naval Service in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the office of the Auditor General in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Indian Affairs in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Immigration and Colonization in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of the Secretary of State in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Public Printing?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many employees are there in the Post Office Department in Ottawa?
2.	What are their names and what salaries do they draw?


Mr. HOCKEN:: 1.	How many employees are there in the Department of Justice in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Militia and Defence in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Marine in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Finance Department in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of the Interior in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Agriculture in Ottawa?
2.	What are their names and what salaries are they paid?
#Mr. HOCKEN:
1.	How many persons are employed in the Department of Public Health?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Trade and Commerce in Ottawa?
2.	What are their names and what salaries are they paid?


Mr. HOCKEN:: 1.	How many persons are employed in the Department of Public Works in Ottawa?
2.	What are their names and what salaries are they paid?


VICTORY LOANS.
[Stage Direction]
On the Orders of the Day:
William Stevens Fielding: May I ask my right hon. (friend the Minister of Trade and Commerce (Sir George Foster) if he will he kind enough to lay on the table of the House a copy of the Order in Council which he read in the course of the discussion yesterday, touching the question of Victory Loan transactions?


George Eulas Foster: I certainty will. I thought that had already been done.


THE BUDGET.
[Stage Direction]
The House resumed from Tuesday, May 18, the debate on the motion of Sir Henry Drayton (Minister of Finance), that Mr. Speaker do now leave tlbe Chair for the Housq to go into Committee of Ways and Means, and the .proposed amendment thereto of Hon. W. S. Fielding.
Andrew Ross McMaster: Mr. Speaker, my first words
must be those of thanks to the Prime Min-

ister for having kindly consented to adjourn this debate in order to give myself and other members of the House an opportunity to examine the very important matters contained in the speech of the Minister of Finance (Sir Henry Drayton) delivered yesterday.
Before considering the speech of the Minister of Finance, there is another speech *which might perhaps be dealt with. As -we listened last night to the two ex-Ministers of Finance, one who adorns the Conservative, -and the other, no less adorns the Liberal side of the House, w-e were reminded of that ancient saying, "Old books to read, old wood to burn, old wine to drink, and old politicians to listen to," because nothing could have been more agreeable -than to listen to the remarks of these two gentlemen (Hon. Mr. Fielding and Sir George Foster), whether one agreed entirely with them or not.
Now, let- me take up the remarks that, after all, were of a somewhat light nature which were ma-de by the Minister of Trade and Commerce yesterday. I cannot attempt to follow him into his figurative or imaginative finance. I am an unworthy member of a church, Mr. -Speaker, that does not believe in purgatory, and I have got an idea that our -claims or assets are either good or bad, and I am afraid that our bad assets do not give room for any doubt as [DOT]to their worthlessness. The minister (Sir George Foster) mentioned the trend towards economy. After all, it is delightful to know that a man who is approaching the milestone of four score can see in the Estimates of this year any trend towards economy. My eyes have not served me for so many years, but I have discovered no trend towards economy at all, and I am afraid that my bon. friend was then simply calling upon his poetic imagination, as -he did later on in the discussion.
Then there was his criticism of the Civil Service. No doubt, Mr. Speaker, the -Civil Service has many aspects in which it might be better. But does any severe criticism of it lie in the mouth of the Minister of Trade and Commerce? He has been associated with -the public life of this country for very many years. Under him for many years the Civil Service grew up, to a certain extent at any rate; and if the Civil Service is badly organized it appears to -me that a leading member of a government that has been in power for the last eight years-too long a time-and for eighteen far too long years some time -ago -has got to share to a very considerable degree the responsibility.
Then we had the Minister of Trade and Commerce acting as a sort of Greek chorus to whatever the Minister of Finance said. "We must have no more loans," says the Minister of Finance; echoes the Minister of Trade and Commerce: "No -more loans." What a splendid policy! No more loans. "We must pay our way," the Minister of Finance tells us; the refrain is taken up by his colleague the Minister of Trade and Commerce: "We must pay our way." Of course, we -must pay our way; of course we must have no more loans. But is not that sort of preaching rather the preaching of an apostle of the obvious? There was one point to which I listened with a certain amount of amusement, and that was the credit and praise which my hon. friend (Sir George Foster) bestowed upon the Minister of Finance for his being truthful. Mr. Speaker, the Minister of Finance belongs 'to the profession to which I belong-


Some hon. MEMBERS:: Oh, oh.


Andrew Ross McMaster: And we do not have to be praised for telling the truth. We are truthful: Cela va sans dire. Then we had some talk about the methods of taxation; there was direct taxation and indirect taxation; and, if I may without impropriety attempt to do so, I may suggest that we had Dr. Fo-ster's judicious compound of taxation, both direct and indirect. We shall examine that mixture later on, but for the time being I merely direct attention to that part of the right hon. gentleman's speech. I will not attempt to follow my venerable, learned and honourable friend into the realms of Shakespeare's Romeo and Juliet or into the more prosaic field of horse racing at the Woodbine track, Toronto.
But I purpose now to take up what I might call -the more serious part of the mental pabulum afforded the country and the House by the Government yesterday. The Minister of Finance, at the outset of his discourse, pointed out that there were two objectives to which this country should bend its energies: first, the resumption of ordinary economic conditions-the economic conditions which prevailed, I presume, before the war;-and, second the endeavour -to reduce the debt. Now, what did he mean by ordinary economic conditions? If he meant conditions which obtained before the war, then I say that those conditions are such that we should not try to resume -them, because before the war mankind was suffering through the conglomeration of great quantities of wealth in the hands of the few, and a great deal of the hardest, the most unpleasant and the most

us some more dreadnoughts, and you will be safe. I know it was difficult when one great nation had set the pace for other great nations to refrain from keeping step -I realize that. But that nation that set the pace has suffered for the setting of the pace-it lies prostrate to-day. What reason is there, unless other nations are imbued with the same miserable, proud, arrogant, selfish, aggrandizing militarisms which cursed Germany

what right .is there for a continuation of that policy to-day? And are we to follow in its footsteps? Canada was one of the most unmilitary nations of the world. I suppose our expenditure on military and naval services before the war, compared to our size, was as small as that of any other nation in the world. I ask you, Mr. Speaker, was there a nation when it got into the struggle that did better? Did our young men who came from the farms, and the counting-house, the warehouse- did they do as well or did they do better than men who had spent three or four years of their life as conscript soldiers? I ask the House to agree with me that we can save at least $4,000,000 on our expenditure on, military services this year. Let the boys who fought for four years overseas enjoy their summer holiday this year in some other way than in camp. I am sure that often when they were overseas they thought of the happy times they had spent in Canada on lake and on river, or in the woods. If the need arises again- please God it will not-they will do their duty once more; but let us lead the way in peace-as we led the way on this continent in war-towards reasonable retrenchment and a stopping of this mad race of armament, this mad race of militarism. I say in all sincerity, Mr. Speaker, that the great standing armies which were supposed to be the bulwark of the safety of the different nations which supported them were sources of danger rather than sources of protection. I say this:	That if onetenth of the expenditures which Europe devoted to military armament and military services had been expended for the purpose of trying to organize international friendship and peace the war would never have come. I say that, militarism has shown that it is a ghastly failure and a stupid mistake, and I ask the people of this, my country, to show the way to cut down that expenditure and to save the money of the people-aye, and perhaps save the future of Canada.

When I spoke like this some months ago the then Minister of Militia and Defence said: We do not fear another war hut we have internal unrest in the country. That is one reason why we propose doubling the permanent force in Canada. To that I made reply then, and I make reply now: That is not the way to keep peace in Canada. Restore free speech; restore a free press; let the people know that the destinies of this country are to be decided by votes-by ballots and not by bullets. If there is unrest in the country give the people an opportunity to select the governors that they wish to have govern them, and you will have no necessity to increase the permanent force.
Now we come to another phase of the question. I find that Railways and Canals, chargeable to capital are responsible for a very large sum of money. My advice to the Government would be that we should save on everything; we should refuse to take on any expenditures except those that are absolutely necessary. Mr. Speaker, you are connected with a large business. If you had a deficit staring you in the face of something like half your ordinary revenue, would you propose to enlarge your plant? No one would do it in private life; no one should do it in public life. I find that the Hudson Bay railway is responsible for $100,000. The Hudson Bay railway I know is dear to the hearts of some of my Western friends, but I would be recreant in my duty if I allowed that fact to weigh with what I have to say. I think that perhaps we are over-built with railways in Canada just at the present moment, and I can see no harm in postponing the expenditure of that money. We propose to expend five and a half million dollars on the Wellartd ship canal. Well, surely the present canal system can take care of the business that is offering this coming summer, with this tremendous increase in the debt of the country. The Trent canal is responsible for $400,000. Surely that can also be postponed. It has been suggested that men who represent counties in this House are always willing to suggest economies for the neighbouring counties. Well, " Let the galled jade wince, my withers are unwrung." I have not been very long a member of this House, but I have never asked for the expenditure of one dollar in my county, unnecessarily-not one dollar for a public work-and I doubt if I have asked for the expenditure of one dollar for any purpose, in the constituency. I would raise my voice

in unison with the voice of the Minister of Trade and Commerce, and I would ask him to go even further and see whether he cannot cut out some of these trade commissioners whose reports, when they are read, show that they must spend a good deal of their time holding down their chairs.


George Eulas Foster: That is not the right representation of their work.


Andrew Ross McMaster: Well, that is what
one would gather from some of their reports. At any rate, my hon. friend can look into the matter; he can promise consideration in his usual considerate manner.
We now come to Railways and Canals, chargeable to income, $50,000,000. Surely there is something to be saved there. Oh, that I could revivify in the soul of the Minister of Trade and Commerce that passion for economy which he showed between 1896 and 19,11!
We now come to Public Works, chargeable to capital $6,400,000. We find Esquimalt dry dock, $500,000; Port Arthur and something else, $600,000; Quebec harbour, $150,000; St. John harbour, $1,250,000; Toronto harbour-and oh, it would be gratifying to have the amount of tonnage which clears from that interesing place year by year- $1,700,000; while the breakwater on the Island-that pleasant place dear to the hearts of Torontonians-calls for an expenditure of $200,000. Then we have Public Works chargeable to income; andTiere Mr. Speaker, I would draw your attention to the fact, that the Amherst drill hall calls for $25,000. Surely this expenditure on the Amherst drill hall might very well be postponed. Then there is a public building in Granby, which calls for an expenditure of $18,000.


An hon. MEMBER:: Where is Granby?


Andrew Ross McMaster: I trust, Mr. Speaker,
that for this offence I shall not be called to order too often. The Toronto Postal Station calls for an expenditure of $425,000. Portage la Prairie has not been forgotten, although the Laprairie motor road may have been neglected many years, and that calls for an expenditure of $25,000.
Then comes an expenditure to which I wish to draw the attention of the House. For years past in the Northwest Territories we had a magnificent police force- a police force of great prestige and the finest in the world. To-day we find it merged into the Royal Dominion Police Force; and that merging means $500,000.
Surely the Royal Northwest Mounted Police -might well have been left in the Northwest Territories, and the administration of order in this part of the Dominion left, as hitherto, to the provincial authorities. Was Eastern Canada such a desperately dangerous place to live in prior to the bringing east of the Royal Northwest Mounted Police? Is it necessary for us to see on the streets of this city the splendid figures of those strapping young men in their red coats and spurs? When I visited Europe I never liked to see the armed gendarmerie in the streets of Paris or elsewhere, and I do not like to see -them in the streets of Ottawa or elsewhere in this country.
It is said of the late Sir Richard Cartwright, after he had examined the Estimates for wharves in Quebec, Ontario, Nova Scotia and New Brunswick, that he ejaculated: "Is there a cove forgot?" And when I look at the provisions made -for wharves and -breakwaters throughout Eastern Canada, I have this suggestion -to make to any hon. gentleman on the otheT side of the House who are responsible for the present administration of our affairs: That they should along with the Estimates print statistics of the number of vessels and the tonnage of those vessels which cleared from these various wharves during the last year of navigation. I cannot tell whether all these wharves are nepessary; they m-ay be; if they are, -we will have to go on paying for them,. but surely something could be saved along this line.
Now let us look at the next item to which I would draw the attention of the House: Mail subsidies and steamship subventions, $1,250,000. If there is one class of people who have been making money during the last two years, it is steamship owners. They have been making money to such an extent that even a single voyage would pay for the cost of the ship. Under -those -circumstances, surely there would be room for cutting out -these annual subventions that have to be voted year by year. I find an item of $340,666.66 for a steamship service between Canada and the West Indies or South America. But the Minister of -Marine and Fisheries (Mr. Ballantyne) has just placed a large number of boats in -commission, at a very heavy cost to the country. It is true that, according -to his statement, interest has been earned upon that outlay; but nevertheless the capital expenditure has been very large. Now, he cannot expect to be allowed to build ships and operate them, and at the same time to pay other people for building ships and oper-

ating them; it is not reasonable. There certainly is room for economy there. Our ' steamship subsidies should, in the light of present conditions, be very carefully scrit-inized.
I see on the other side of the House the member for Lambton East (Mr. Armstrong). I trust that I will have his support, as his eloquent voice has been raised in this Chamber on many occasions to show us the extortionate profits that the steamship companies have been making, and to be consistent he ought to support my demand in regard to these maritime subventions.


Ernest Lapointe: Will he?


Andrew Ross McMaster: I find there are also subsidies to wrecking plants to the amount of $35,000. Surely that industry might stand on its own legs, or rather sail on its own ship's bottom.
Then I come to Public Works, $20,000,000 for the Government shipbuilding programme. Well I have already said all I have to' say in that connection on another occasion, and I do not wish to delay the House by repeating it.
But there are two other items in the Estimates to which I wish to draw attention, they are the subventions paid by the Government to two press associations, the first being to the Canadian Press Association to the amount of $50,000. I say that that is a very vicious subvention.-


Ernest Lapointe: Hear, hear.


Andrew Ross McMaster: -I say it is a vicious practice for a government to subsidize a press. The other item is $20,000 for the Associated Press. I do not believe that the Government is now printing the Official Record. I think that that interesting periodical has disappeared-to the regret of none,-


Ernest Lapointe: That is too bad.


Andrew Ross McMaster: -from the periodical lists of this country.


Mr. ARCKAMBAULT:: Puffery.


Andrew Ross McMaster: You know, Mr. Speaker, years ago when a person wanted to clinch an argument, he would say, "I saw it in print." Now if one wants to discredit an argument in a friendly manner, one says, "Oh, that is just newspaper talk." That signalizes the depreciation which the press has suffered in public opinion. And the press for their own sake, as well as the Government for its own sake and for the sake of the pockets of the people should put
[Mr. McMasterJ
a stop to these payments; there should be a free press.
I believe that the journalists of this country are high-minded men, I believe that they want to say the right thing-whether they are always at liberty to say the right thing is another matter.
Now, I have endeavoured to show and perhaps at greater length than I should have attempted-


Some hon. MEMBERS:: Oh. no.


Andrew Ross McMaster: -the economies, which should be practised. As a matter of fact I would like to trace out the footsteps that the Government may follow in continuing their trend towards economy.
The new tax proposals I will now deal with. And just let me say here, how delightful it was last night to listen to the Minister of Trade and Commerce talk, not about Union party-he had forgotten all about the Union party-but about the Liberal-Conservative party, about which he tallied with enthusiasm. I understand that a political club in Ottawa is now waiting to know what the Government is going to do so that it may be in a position to style itself either a Union or a Liberal-Conservative club. But, after all, it must be difficult to make these changes. One man in his time plays many parts, and my right hon. friend (Sir George Faster) used last night one of the various titles of his party -the Unionist party, the Liberal-Conservative party, the Conservative party and the Tory party-mais, pour moi, toujours la meme chose! But for me, Mr. Speaker, always the same thing.
Before attempting to consider the duties which the minister has brought down, may 1 make this preliminary observation: That these taxes should not have been brought down before the minister had informed us that he had exhausted other and more direct means of taxation. During the last five years, there has been in this country a great deal of money heaped up in a comparatively few hands. During the war there were those who called, with alt sincerity, "for the last man and the last dollar." But some others there were who crying the most loudly meant the last dollar they could get out of the situation-and they got it.
Now, in Great Britain, to which I like to go for examples in sound finance, a Committee of the Treasury has reported that a levy on war wealth is perfectly feasible and would bring into the coffers of the State a very large sum of money.

Now, I will say this for the very wealthy people in the ipart of the country from which I come: That their sons and the young men among them left their luxurious homes and went to the front as gallantly and as gladly as those in humbler circumstances. I 'believe that there are many among the rich men of Canada iwho would have no objection to giving up a very large portion of the wealth which they made during the war, provided that the tax strikes everybody equally; that all are treated alike. I think that the Minister of Finance has been somewhat negligent, if I may dare ito use the word, in not sounding to the bottom that proposal and either bringing it in or explaining to us iwhy it cannot be brought in.


John Allister Currie: Will the -hon. gentleman permit me to put a question to him, now that he lis on that very interesting subject? I would like to know 'his 'own view; [would he favour a direct levy on wealth in this country?
Mr. MoMASTER: I would certainly advocate a direct levy on [war wealth; that is to say, wealth which was accumulated because of the war. It seems to me that that is an absolutely proper subject of taxation. Whether a levy on all [wealth would be required is another matter; I would like to exhaust the possibilities of the levy on war wealth before I went into the question of a levy on all wealth. But I may point out to the hon. member that we have to find money; we have to pay back a large part of the deibt, while the level of prices is high. To-day with a bushel of wheat you can pay off, I suppose, three dollars of the national debt, but if we wait for ten years until foodstuffs resume their normal price level, we may find that it will require three bushels of wheat to pay off three dollars of the debt.
Let me make also this preliminary observation. Excise duties which have been brought down are open to the objection which pertains to all duties on consumption; that is to say, they are unequal in their .incidence. Take a man who has "his quiver full"; let us say that he has six children. The man who lives next door, with an equal income, has perhaps only one child. Any tax founded on consumption is bound to strike much more heavily the man with the six children than the man who has only one child.
4 p.m. These excise taxes are open to this Objection; a tariff, even a tariff for revenue, is open to the same objection.
I should also like to direct the attention of the House to the fact that the excise duties now proposed are superimposed on the tariff, and that they should -rather be countervailing to the tariff. Let me illustrate. Suppose I have some money which I can invest in a motor car,-a somewhat unwarranted suggestion,.but let us make it for the -purpose of argument. If I go to Detroit, buy a car for $1,000, and bring it into Canada, I will pay, under the new duty of 35 per -cent, the 7^ per cent having been taken off, $350 by way of customs duty, and then I will pay a 15 per cent excise tax or $225, -a total payment to the Government of $575. Buit suppose instead of going as far as Detroit I stop at Toronto and buy a -ear there; I will find that I can purchase a car equivalent to the ear that would cost me $1,000 in Detroit, for just about $1,500-. But how much Will the Government get out of my purchase? $225 instead of $575. What we have to do in this -country is to deflect into the treasury a great deal of the money which is going into the pockets of the -privileged classes, the manufacturers. The ex-Minister of Finance, the member for Shelburne and Queen's (Mr. Fielding), whose moderation in statement is known and appreciated by all members of this House, last year said that 'he believed that 'for every dollar that went into the treasury of the country through the operations of the tariff, ait least two dollars went into the -pockets _ of private -interests. What we have to -do is to take some portion of that two dollars and deflect it into -the treasury, not leave it in the pockets of the protected manufacturers.
Now, let us see how this would work out. Suppose instead of superimposing a tax of 15 per cent on motor cars we impose an excise tax of 10 per cent on imported motor cars and of 20 per cent on 'home produced motor -cars. What would the result be? The profits of -manufacturers of motor cars would be somewhat reduced, and I do not think that would hurt the country. The trasury would benefit by a very large amount and the consumer would not pay any more than he is paying now. Surely that should appeal to the Government, if it wants to get on the road to economy.
In all other countries-perhaps I should not say in all other countries, but certainly in Great Britain-the principle of -a countervailing excise tax has been admitted and has been operated. For instance, into India there is imported year by year a vast quantity of cotton. A tax of 10 per cent, I think, is collected by the Indian

authorities upon the cotton *which conies into the country, but a countervailing duty of 10 per cent is placed upon the cotton manufactured in India in order that no private interest in that country may enjoy the benefit of special privilege and in order that the Government may reap the full benefit of the tax. I think that that point will appeal very strongly to the people of Canada.
There is another point which I wish to make in connection with the excise proposal. An excise tax should bear not on necessities but primarily on goods the consumption of which is to be discouraged rather than encouraged, such as an excise on beer and whisky. These are to be discouraged-


An hon. MEMBER:: Order.


Andrew Ross McMaster: 
John Allister Currie: I have been in the United States and I ought to know. The tax is payable on the whole purchase price there, just the same as it is here.


Andrew Ross McMaster: My information is to the contrary.


Mr. LALOR:: Like the hon. member for Simeoe, I know something about this matter, and he is absolutely right in his statement.


Andrew Ross McMaster: Am I wrong in my
statement?


Francis Ramsey Lalor: Yes, there is no question
about it. '


Andrew Ross McMaster: I do not buy as much in the United States as my Tory friends on the other side, but I understood that my explanation was correct, and I gave it to the House in good faith.	[DOT]
Mr. LALOR; I am sure the hon. member does not want to make a mis-statement. I can tell him that he is absolutely wrong.


Andrew Ross McMaster: I am quite willing to admit that my friends from Ontario know more about buying things from Buffalo and Detroit than I do, because I buy at home in Montreal, where I live. As the hon. member for George Etienne Cartier (Mr. Jacobs) points out, with his usual logic, it is a very ridiculous tax if it is imposed in that way.


Mr. EULER:: My hon. friend from Brome (Mr. McMaster) is'absolutely correct in his statement that in the United States the tax is paid only on the excess over a certain amount, I know that from personal experience.


Andrew Ross McMaster: My explanation of this difference of opinion is that when a Liberal

goes into an American store they size him up and know they cannot put anything over on him, but when my hon. friends opposite go in, they charge them 10 per cent on the whole amount. Perhaps another explanation is that they have more money to pay the tax with.


Francis Ramsey Lalor: If the hon. member for
Waterloo (Mr. Euler) will come to Buffalo with me, and his statement is correct, I will buy him a new hat.


Mr. MURPHY:: He is too young for that,


Mr. DEPUTY SPEAKER:: I must remind hon. members that the House is not in committee, and that the hon. member for Brome has the floor.


Andrew Ross McMaster: ate industries are those which can .stand on their own 'feet, and pay their own way, and which do not require to be 'bonused by the taxpayers of this country.
Then the Minister of Finance added:
-to the end that a proper and ever-increasing flelU of useful and remunerative employment be available for the nation's workers.
Oh, how old that sort of language is! We heard it when the National Policy was preached in 1878. I am quite sure that the Minister of Trade and 'Commerce spoke words similar to those in 1878 when^ the Conservative party got in, and from 1878 to 1896 the trails from Canada to the United States were thick with people who were pulling up their stakes in this country and crossing the line. Theie was no real turn in the tide until 1896. when the Liberal Government did reduce the tariff. It is true that the Minister of Trade and Commerce may try to make fun of that statement, but it cannot be gainsaid that there was a reduction. It did not go as far as I should have liked, nor was it persisted in to the extent that I should have liked; but there was a reduction and it redounded to the advantage of the country. Further, the minister said:
__to develop to the fullest extent our natural
resources.
Well, we all desire that; it is a question as to means.
__to specially promote and increase trade with
the Mother Country, the sister dominions and colonies and Crown dependencies.
I have pointed out the manner in which this Government has developed trade with the United Kingdom by the way in which it handles exchange, which discourages imports from' the United Kingdom and encourages imports from the United States. I see nothing in this statement as to trade with the great neighbour to the south of us, and I cannot understand the mentality of the man who looks for trade in the West Indies before he looks for it in the United 'States of America.
-to prevent the abuse of the tariff for the exploitation of the consumer, and to safeguard the interests of the Canadian people in the existing world struggle for commercial and industrial supremacy.
Why will these protectionists always talk about commerce as if it were war? Commerce is not war, but mutual service, and the interdependence of peoples, fostered and brought about by commerce, is one of the surest guarantees of world peace. I will not weary the House with reading any further from the speech.


Some hon. MEMBERS:: Go on.


Andrew Ross McMaster: If hon. members desire that I should go on I shall comply with their request?
As a means of raising revenue the tariff should be so adjusted as to place the chief burden upon those best able to bear it. Articles of luxury should be heavily taxed through the Imposition of customs and excise rates. Food commodities and other necessaries of life, not produced or manufactured in Canada, should, if taxed at all,-
Note the subjunctive, Mr. Speaker.
__if taxed at all, bear only such imposts as are
necessary for revenue purposes. Those produced in Canada should be subjected to such customs duties only as may be necessary in the general national interest to be determined after strict investigation from time to time.
The minister continues in that strain. Now, I have some remarks to make upon this pronouncement of policy. First, it is indefinite; and, secondly, I say that in so far as it possesses anything of a definite character at all, it is a re-statement of the old National Policy, the old protectionist National Policy. And I for one should be glad if the Minister of Finance, as soon as the Franchise Bill is passed, would ask for a mandate from the people upon this old National Policy. We would meet him, and if fair argument appeals to the Canadian people, and if the (Canadian people are, as I have no doubt whatever they are, intelligent folks, when the election was over we would be sitting on that side of the House and hon. gentlemen who are sitting there now would be on this side?


An hon. MEMBER:: 
Francis Ramsey Lalor: May I interrupt the hon.
member to ask if he has read the whole resolution?


Andrew Ross McMaster: I am going to read it. I shall read the whole of it; I am commenting on it as I go along. I would almost think that the Minister of Finance had been reading this resolution and had been struck by its wisdom, that he had been about to indite something similar to it when his hand was stayed by the more experienced hand of the Minister of Trade and Commerce, who said, "What are you going to do? Are you putting into our platform a part of the Liberal party's platform? Don't forget that you belong to the Liberal-Conservative party. You must not do anything like that." The resolution continues:

and repair parts thereof, rough and partly dressed lumber, gasolene, illuminating, lubricating and fuel oils, nets, net twines and fishermen's equipments, cements and fertilizers,' should be free from customs duties, as well as the raw material entering into the same.
That a revision downwards-
You know, Mr. Speaker, the promise of my hon. friend the Minister of Finance just calls for a thorough revision, but he does not tell us in what direction that revision is to go.
That a revision downwards of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption (other than luxuries), as well as on the raw material entering into the manufacture of the same.
That the British preference be increased to 50 per cent of the general tariff.
There is a specific proposal. Compare it for a moment with the vague generality of 161
my learned and hon. friend the Minister of Finance:
-to specially promote and increase trade with the Mother Country, the sister dominions and colonies and Crown dependencies.
Is there any statement made there that there is going to be so much in their favour? No, that is left for the future to disclose. If I remember aright, the old Conservative party, in the days gone by, abused in unsparing measure my hon. friend from Shelburne and Queen's when he introduced the British preference. But now a change has come over the spirit of my hon. friend the Minister of Finance, and he proposes, but not in any definite language, to foster trade relations with the Old Land:
And the Liberal party hereby pledges itself to implement by legislation the provisions of this resolution when returned to power.
That is the tariff plank of the Liberal party. It closely approximates, although it is not in all respects precisely similar to the tariff policy of that other great progressive force in this country, the Farmers' party.
Let us see for a moment why -we think this is the proper time to adopt this policy. I believe that protection is an evil thing, I believe it brings evil and not good to the people, the manufacturers and the Government of Canada, and that its influence throughout the world has been for harm. I believe with the hon. member for -Shelburne and Queen's, that in the beneficent wisdom of Providence He intended each part of His footstool to supply out of its surplus the other parts and that all should form one whole. I believe that by an adherence to this policy we shall find peace for the world as well as increased wealth for ourselves.
There are two great causes which have -made for international jealous)'. -Chauvinism, or Imperialism, is one, and Protection is the other. The great protectionist nations in Europe were anxious to increase the ambit of their power for what reason? That they might exploit -the peoples and the resources of the uncivilized nations that might come under the power of -their governments. I believe that few things have -made so much for international discord as the principle of protection.
We have reached a time in the -history of this country when every ounce of national energy and every dollar of national -capital have to be put into those channels which will produce the greatest economic return, not only in this country but all the world -over. In a book -written by Mr. Keynes,



am authority who is admired all over the English-speaking world, he proposes a remedy for the ills of the war, and what is that remedy? That Europe shall become a free trade territory-a free trade entity. We have a tremendous amount of wastage to make good. The world has five years of wastage to make good and that we can only do with reasonable celerity by each nation devoting its energy and capital to. those lines of activity in which it has the greatest advantage and then by a free interchange among them all. That is the policy which the Liberal party aim at in the future. That is the policy which I wish to see adopted in this country. I do not propose that it shall be adopted to-morrow. I am willing to give every reasonable opportunity for men who have developed their industries undeT a false economic system to adjust themselves to the new conditions, but we have to move forward and we have to move forward with sufficient speed not only to show in what direction we are going, but also to show that real progress has been made.
There has been in years gone by in the mouth of my protectionist friends an argument which has appealed to me as not being sound, but as being arguable. It is this:	We would be prepared in do away
with the tariff or at least accept freer trade provided we had a market to enable us to carry on production upon a large scale, because when you have production on a large scale you are as a rule able to reduce the cost of the unit. For many years the United 'States maintained a high tariff against the importation of Canadian goods. But the United States has turned from being a highly protected nation, from a nation which collected most of its revenue through a tariff, to a nation which collects 95 per cent of its revenues through direct taxation. Where as in the last fiscal year the United States, with a population fourteen times or thereabouts greater than ours, collected through its tariff about $189,000,000, we collected through our tariff $169,000,000, the United States collecting less than $20000,000 more than we collected. The United States has a free list much more extensive than the free list we have. The United States has become much freer in regard to trade than it was before. We cannot expect to exist on the northern half of this continent as an independent political power unless we are able to have a fiscal policy as economically sound as that of our neighbours to the South. We cannot expect to attract and hold people in this country unless we are prepared to give them as good

living conditions as they will find on the plains of Dakota o>r of the Argentine Republic. It is not merely a question of economic theory; it is a condition as well as a theory which confronts us, and that condition is that we have spent vast sums of public money to develop our western lands which are largely empty, and until these western lands are filled up the great capital expenditures that this country has incurred will not carry themselves. We cannot fill up these great lands of the West unless we are prepared to give to the newcomers and to give to those who are already there conditions which will enable them to .meet the competition which they have to meet when they export their products to the markets of the world.
In order that the fact of the United States has now a very large free list may be borne in on the minds of the people of this country I have arranged their free list in a series which I call "Reduction Rimes." This is very low grade poetry, and I would not have dared to place it on Hansard if I had not been encouraged by the action of the right bon. the Minister of Trade and Commerce, who last night made an incursion into Shakespeare and referred us to the grapes of Escol. Even if this is an inferior brand of poetry it is original. We have no assurance that Shakespeare is original; some people say that it was Bacon who wrote the works that are attributed to Shakespeare. This is a list of the things which are on the American free list:
Reduction Rimes.
Setting out the many articles now upon the TJ.S. free list.
Agricultural implements, first on our list, Next animals for breeding must not be missed.
Bread, biscuits and buckwheat are next in the line,
While flour of the latter makes pancakes so fine,	.
Cash registers, machines for setting up type, Show that for trade progress the U.S. is ripe. While sewing machines, the housewife's delight,
Keep company good with the typewriter bright.
Machinery for shoes and Portland cement Join the procession of nothing per cent.
Coal, coffee and cocoa come next in a row, Cotton and corn from where warm breezes blow;
Eggs, fish, fats and berries march next in the line,
With furs, skins and gloves to withstand a cold clime,
Grease, fats and oils which do similar work, While lard and lard compounds their duty don't shirk;
To warm up the feet they use duty free boots, While harness on horse helps get in the roots;

Free beef, veal and mutton they greatly enjoy,
While hams, lamb and bacon no duties annoy.
Nails, staples and horseshoes are on the free list,
Tacks, needles and oilcake must never be missed.
Oils for eating, for lighting, of all sorts, are found,
While rye, sago and salt are not to be bound.
Seeds to increase their production so great
Are found with the haddock, the cod and the skate.
Swine, cattle and sheep, the boundary cross,
Join wheat, tea and tallow without fiscal loss;
Barbed wire as in Canada now pays no tax,
Nor do logs, planks or clapboards to cover the cracks.
Wool of sheep, camels' hair are the last on my list;
I need not declare there are many I've missed.
Mr. Speaker, protection as a policy for this country is not only dead, but, after the next election, it will, as Disraeli said, be damned.


Charles Colquhoun Ballantyne: Mr. Speaker, in rising to reply
to my poetical and free trade friend from Brome (Mr. McMaster) I wish first of all to compliment him upon the very kindly manner in which he has treated the able Budget speech which was yesterday delivered by my colleague, the Minister of Finance. During the long speech to which we have just had the pleasure of listening, the hon. member (Mr. McMaster) has not uttered one word relating to a policy of a constructive character. He has reiterated once more his fealty to free trade principles; he has once more condemned the policy of protection for Canada; he has, in a general way, referred to the Budget, but he has not enlightened the House as to the ways and means of raising revenue that he would adopt if he were occupying a seat on the treasury benches. Later on I shall deal in greater detail with my hon. friend's remarks. Let me first take notice of his observations with respect to the Main Estimates. The gist of his argument amounted simply to this: he wants this fair, progressive and enterprising Canada of ours ' to fold her arms, to sit still, to put the shutters up, to let the grass grow on the steps. My hon. friend does not want any money spent on the deepening of the Welland canal, he does not want- any money spent on building ships, he does not want any money spent on maintaining the militia force of Canada. In a word, he does not want any money whatever spent; he is satisfied-and I take it from the applause of the hon. gentlemen sitting around him, that they are satisfied also-to sit still and not IGli
endeavour to take advantage of, and develop, the wonderful possibilities of Canada notwithstanding the large war debt that we have to struggle with at the present time. My hon. friend made only one suggestion this afternoon, if I followed him correctly. He said that a committee of the Imperial House had considered the advisability of levying some special form-


Andrew Ross McMaster: May I correct my hon. friend? What I said was that a committee of the Treasury Department, not of the House-a committee of civil servants-were to examine into the matter.


Charles Colquhoun Ballantyne: I am quite willing to accept the correction of my hon. friend, but it does not alter his argument. He informed this House that a proposal was under consideration in Great Britain at the present time to levy a special tax on what he is pleased to call, " war wealth." I wish to state that Great Britain has not adopted such a proposal. True, the proposal has been made, but it has not yet been adopted.
With reference to the Budget presented by the Minister of Finance yesterday, I am satisfied that it will be favourably received throughout the country, and that under the circumstances it is the very best that it was possible for any government to, prepare. A close study of the Budget will reveal a few salient points worthy of notice. First of all, the luxury tax is placed on those best able to pay it; it does not apply to eatables, nor to articles of wear that are of moderate price. I am sure that the country will be perfectly satisfied that the luxury tax shall apply to those people who have money to buy boots and shoes costing over $9 a pair, or a suit of clothes that will cost over $45. It is not only fair, but it is most reasonable, that they that have the money should be those to come under this special luxury tax. It is clear to everybody except the hon. member for Brome, that this tax does not apply to persons of moderate means. I heard some reference in the House last night to the possibility that our brave and courageous women might make some objection to this luxury tax. I, for one, have no such fear. During the recent war the women of Canada showed where their hearts were; they stood loyally behind the government of the day, and our soldiers at the Front, from the very beginning of the war until i.ts victorious conclusion. The heavy burden of taxation that now must necessarily fall upon the people is only an aftermath of that war, and I am satisfied

that the women of Canada are willing to bear their fair share of that burden. They will cheerfully do so because of the recollection of their beloved ones who will no lunger return to them, for the sake of the wounded and those who will be blind forever; and for the sake of the national welfare as well.
A very important point in connection with the Budget is that it will give Canada sufficient revenue not only to take care of the ordinary expenditures, but also to pay off part of our national debt.
1 wish to refer briefly to the business war profits tax. I know that there is a general feeling throughout Canada among the business men that this tax should have been dropped. I realize and appreciate the many objectionable features that pertain to it; but when we know that Great Britain is not only maintaining a similar tax, but has raised it from forty to sixty per cent, and that the United States is also retaining on her statute books a similar method of collecting money, in view of the very great necessity for Canada to obtain the necessary revenue, the Government could not see their way clear to entirely eliminate the business war profits tax.
I am sure it will be gratifying to the business men of Canada to know that there have been made certain reductions to which I need not refer in detail, as my colleague the Minister of Finance (Sir Henry Drayton) dealt with them yesterday in his Budget Speech. Our Income Tax has been raised. It is not only as high as the Income Tax of our neighbour to the south, but it is still higher as a result of the five per cent added yesterday. The Government have also placed a tax on sales. It will, I think, be manifest to every one in this House and outside of it, that the burden of taxation now falls, as it properly should, on those best able to bear it.
My hon. friend from Brome (Mr. Mc-Master) has stated that the Government have made no effort to reduce the high cost of living. I must take issue with him there, because as the Minister of Finance explained yesterday, the Government have eliminated the special war tax of 7i per cent, thereby losing a revenue of $30,000,000. I am satisfied, and so will be every reasonable man, that that reduction of 7i per cent must of necessity reduce the cost of living. The Government fully appreciate the urgent necessity of more revenue to take care of our war debt and our heavy expenditure, but in an honest endeavour to

bring down the cost of living they made that reduction.
In this connection, Mr. Speaker, it might be of interest to know what our sister overseas dominion of Australia is doing in re-gar to tariff matters. I do not know whether she possesses as a member of her Parliament such an ardent free trader as my hon. friend from Brome, but judging from the article which I am about to refer to I should not think there are many free traders in the Parliament of the Australian Commonwealth. It will be seen from this article that the Government of Australia have revised their tariff, not downwards but upwards. I will read the article:
The Australian Tariff.'
An important revision of the tariff of Australia recently made imbeds more firmly the principle of protection to native industry, increases rates of duty for revenue purposes, and provides contingently for reciprocal tariffs with British countries. A cablegram from the Canadian Trade Commissioner at Melbourne runs as follows:	.
"Tariff Bill introduced Parliament, March 24, and becoming operative Maroh 25, has three schedules similar to Canadian. All embargoes and restrictions hitherto Imposed upon importations such as confectionery, motor car bodies, etc., absolutely cease on May 19. Excluding existing limited African agreement, no preference has been granted any dominion, but minister stated that bill provides for reciprocal arrangements with any dominion on the basis of British preferential tariff or intermediate schedules whole or partly and to foreign countries under intermediate only but subject to approval of Parliament. Tariff strongly protective with increased British preference. Marked increase duties iron steel products, motor car chassis, and bodies."
The consequence of this legislation can scarcely be other than the contraction of the somewhat limited market Canada has hitherto found in Australia. There is a preference given Great Britain, according to one despatch, of from ten to twenty per cent, but other advices indicate a much greater preference. The tariff on manufactures of iron, for example, is said to be:
		From United King- dom.	From Can- ada.
Pig iron	20s	40sBillets	32s	65sWire rods	
Black and galvanized	sheets	44s	80safter June 1, 1922. .	65s	100 sAt present	
Plates and sheets	heavier	Free	10%than 1-16, after June	1, 1922	48 s	85sAt present	Free	10%Barbed wire	68s	105sBolts and nuts	27i%	40%Wood screws	Free	10%Tacks and spikes. . . .	5 is	8swhichever is higher.	325%	45%If the foregoing schedule of duties	is retained, there will be small chance of Canadian
manufacturers obtaining a footing in the Australian market in competition with Great Britain. Of the preferential feature of the tariff no complaint can be made, and it is the business of the Australian Parliament to legislate as seems to it in the best interest of that country, but when the avowed object of the tariff is to promote British trade, Canadians may with reason contend that as a member of the Imperial family they should not be excluded from opportunity to trade on equal grounds with the United Kingdom. There is not now, nor ever has been, a reciprocal tariff between Canada and Australia. New Zealand, South Africa, and some other British countries do enjoy the preferential tariff in respect of their exports to Canada, but Australia has hitherto declined an arrangement for reciprocal commerce. The Canadian Government should without delay open negotiations for the extension of the Australian preferential tariff to this country. The time Is opportune, the need urgent. The Australian legislation opens the door, and with mutual goodwill existing, with a desire on the part of both dominions to promote Imperial trade, the hope may be entertained of more family and friendly treatment being extended to Canada than being placed on a parity with foreign nations. It has always seemed an anomaly that Canada's preferential tariff should extend to New Zealand, and not to Australia, though the fault is not that of this dominion. In any event if our trade with the Antipodes is to grow, the Government should hasten to conclude a reciprocal tariff arrangement.
That will serve to show what our sister dominion is doing. Australia evidently believes in the policy of moderate protection. Canada believes in the policy of moderate protection, I believe in that policy, and so does the Government and the party to which I have the honour to belong. I do not believe in free trade. And, Sir, there lire many hon. members on the other side of the House who do not believe in free trade any more than I do.
I was rather amused to hear the hon. member for Brome this afternoon citing the tariff policy of the Liberal party as enunciated in the resolution adopted at its convention held in this city last August. I am sure the House will bear with me if I read that resolution once more, because it is well worth while to keep it very plainly before not only the members of this House but before the people of the country. It reads as follows:
That the best interests of Canada demand that substantial reductions of the burdens of customs taxation be made with a view to the accomplishing of two purposes of the highest importance:	First, diminishing the very high
cost of living which presses so severely on the masses of the people; second, reducing the cost of instruments of production-
That is a very vague expression, and I hope that when the hon. leader of the Opposition addresses the House he will explain what the Liberal party means when they refer to the " instruments of production." In my judgment, that would refer to everything that is made in this country.
-in the industries based on the natural resources of the Dominion, the vigorous development of which is essential to the progress and prosperity of our country.
That, to these ends,

And here is the important part:


wheat, wheat flour and all produots of wheat; the principal articles of food; farm implements and machinery; farm tractors, mining, flour and saw-mill machinery and repair parts thereof; rough and partly dressed lumber; gasoline, illuminating, lubricating and fuel oils; nets, net-twines and fishermen's equipments; cements and fertilizers, should be free from customs duties, as well as the raw material entering into the same.
That a revision downwards of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption (other than luxuries), as well as on the raw material entering into the manufacture of the same.
That the British preference be increased to 50 per cent of the general tariff.
And the Liberal party hereby pledges itself to Implement by legislation the provision of this resolution when returned to power.
During the short time I have been in public life I have thought that when a great party, after having given serious consideration to the question of what their fiscal policy should be, published at a convention its deliberate policy in that regard, that policy would receive the unanimous approval of the members of the party and would be adhered to by them when speaking on the floor of this House and on public platforms. But, Mr. Speaker, the ink was hardly dry on this famous resolution before the hon. leader of the Opposition (Mr. Mackenzie King) delivered a speech at St. John, New Brunswick. The newspaper report which I have of the hon. gentleman's speech is headed in large type, " Mackenzie King for Free Trade." Then follows the hoh. gentleman's speech, which I will now quote:
The Liberal leader favoured the abolishment of all tariff duties,-
I cannot find that in the tariff resolution of the Liberal party. Let me quote the report in this newspaper:
The Liberal leader favoured the abolishment of all tariff duties, all instruments of production in industries based upon the natural resources of the Dominion, such as mines, fishing, lumbering and agriculture, the development of which is essential to the progress and prosperity of the country.

Well, the leader of the Opposition had scarcely delivered that speech when one of his followers, the member for West Lamb-ton (Mr. Pardee) made a speech before the Liberal Reform Club in Montreal. He said nothing about the policy of free trade as enunciated by the leader of the Opposition in his St. John speech, and he carefully avoided any reference to the Liberal tariff policy as adopted at the Liberal Convention held in Ottawa during last August. But I must say that I agree with the remarks of the hon. member for West Lambton on that occasion. He said that he was a protectionist; aye, he even went so far as to say how he would fix the tariff. He said that in his opinion a tariff should not bear a lower ad valorem duty than 25 per cent. It seems strange to me that shortly after the adoption of this tariff policy at the convention in August the hon. member for West Lambton (Mr. Pardee) should make the strong protectionist speech that he did before the members of the Reform Club of my city. I will say this for the wisdom of my hon. friend: He knew the city that he was speaking in; he knew the proper policy to enunciate there.
Now, a by-election was held in St. James division in Montreal. If there is any constituency in Canada which does not want - to listen to free trade talk or any suggestion about slaughtering the tariff so as to crush our industries, it is the constituency of St. James, Montreal. My genial and astute friend the member for Beauce (Mr. Beland) who was doing all he eou(d to elect the hon. member who now represents that great division in this House (Mr. Rinfret), also made a very strong proteetionist speech. But that is not all. I have listened with a great deal of pleasure to the expressions of very strong protectionist sentiment that have come from the hon. member for North Cape Breton and Victoria (Mr. McKenzie). He and I do not always agree, but when it comes to tariff matters I think we do. The hon. member holds good, strong, protectionist views, and how he could have swallowed the policy that was adopted at the Liberal convention last August, how he could have stood for that platform, is more than I am able to comprehend.
But I understand also, Mr. Speaker, that all was not milk and honey at that convention. By the little birds who chirped on that occasion and who were not in the know-that is, in the inner circle-I have been informed that many good and true Liberal protectionists strongly objected to the proposed tariff resolution when it was being considered by

a committee, and that they were absolutely opposed to it on the floor of the convention. Not only that; the Liberal Premier of British Columbia also made a speech during the course of the convention in which he expressed himself as being opposed to the Liberal policy as I have just given it. Moreover, Sir Lomer Gouin, the greatest French Canadian Liberal that we have in the province of Quebec, made a speech in the city of Quebec at a meeting which was attended also by my colleague, the Minister of the Interior (Hon. Mr. Meighen). The Minister of the Interior and Sir Lomer Gouin both made protectionist speeches on that occasion, and notwithstanding the eloquence and convincing logic of the Minister of the Interior-and he never was in better form than he was at that banquet-the Premier of Quebec excelled him-and made a much stronger protectionist speech than did even my colleague. The papers did not publish the speech of the Premier of Quebec, but I have it here and I will read what Sir Lomer Gouin said on that occasion:
I understand that you feel anxious on a certain question of public policy with regard to the future of your industry.
Referring to the boot and shoe industry.
X mean the tariff. This was the theme of the speech I read this morning. I would not like to be excommunicated-
Listen to this:
I would not like to be excommunicated for what I will say now. but I would like to speak my mind very candidly.
I remember the day when many, too many, of our people, labourmen, farmers and merchants, had to leave the province of Quebec and emigrate to the United States. At that time I know there were very few manufacturers in the province of Quebec. X could not say why so many left Quebec, but they had to go for one reason or another.
We now have manufacturers in Montreal, Quebec, Trois Rivieres, Sherbrooke, and all our centres of a certain importance, and I cannot help but think that these manufacturers have contributed to bring back many of those who had gone and to keep with us many who would have had to go were it not for such industries.
What we want in Quebec is a tariff that will keep our industries going-
A little different from the tariff policy of my friend, the leader of the Opposition.
-our labourmen working for good wages, and the most deserving of all our citizens-our good farmers-content and prosperous.
I am not asking for a tariff of 15 per cent, 25 per cent, 30 per cent, or 40 per gent; give us a fair tariff that will keep alive honest industry on our good soil of Canada.
These, Mr. Speaker, are the wise words of one of the ablest statesmen in Canada,

a man whose utterances and policies carry far more weight in the commercial metropolis of Canada, the city of Montreal, than do any words of my hon. friend from Brome (Mr. McMaster).
Mr. Speaker, it has been my privilege to live in the province of Quebec since my boyhood days,-and it is indeed a great privilege to live in that province and to mingle with our French-Canadian friends. So far as I know their views on fiscal questions they are not free traders; they are protectionists. But I am afraid that the new Liberal party of to-day is in the hands of reactionaries and young bloods and that the old policy that was carried out for fifteen years by the late Bight Hon. Sir Wilfrid Laurier and the then Minister of Finance (Mr. Fielding) is no longer the policy of the Liberal party. Last night that veteran statesman the hon. member for Shelburne and Queen's (Mr. Fielding) rose in his place and made statements like this: ''I have been criticized by my party for believing in the policy of protection, but I still believe in it. I have been criticized by certain members of my party because I was willing when I was Minister of Finance to assist infant industries; I have no regrets or apologies to offer now. I thought that was the right policy then, and I think it the right policy now." Again, he said that during his term of office-and he certainly was a most excellent Minister of Finance-he gave certain bonuses to the steel industry in this country. He was criticized at the time, he said but he believed in bonuses then, and he believes in bonuses now. I ask you, Mr. Speaker, and I ask hon. members of this House and I ask the people of the country how they can judge; how they can form any opinion as to the policy of hon. members opposite? True they did draw up this policy, but the leader of the Opposition, as I have said, deviated from it, because he said in the city of St. John that he was in favour of free trade.


Mr. MACKENZIE KING:: I was not here when my hon. friend read the particular despatch from a paper, but two or three times he has mentioned in my presence that in the speech which I made at St. John I departed from what is laid down in the platform of the Liberal party. In the speech I made at St. John I was reading from the platform of the Liberal party as laid down at the convention. I said that I stood by that platform, and I repeat that statement now.


Charles Colquhoun Ballantyne: Of course, I must accept the explanation of my hon. friend, but as he was not in the House at that time I shall read what the press reported him to say on that occasion:
The Liberal leader favoured the abolishment of all tariff duties.


William Lyon Mackenzie King: That clearly
is a statement by a reporter in a general way. While speaking on that occasion I had in my hand a copy of the platform of the Liberal party and I read what is contained there, as I shall read it to this House again when I have the privilege of speaking in this debate.


Charles Colquhoun Ballantyne: Do I understand
that the leader of the Opposition is not in favour of the abolition of duties?


William Lyon Mackenzie King: I am not in favour of the abolition of all duties; certainly not.


Charles Colquhoun Ballantyne: I must accept the
hon. member's explanation that the press incorrectly reported his speech.
Inasmuch as my hon. friend has given us to understand that he is not a free trader and would be in favour I judge, of a certain form of protection, and as the hon. member for Brome (Mr. McMaster) has reiterated in this House this afternoon that he is an absolute free trader, if our friends opposite should come into power it is quite likely the hon. member for Brome, who has been the financial critic of the Opposition for the last two or three years, would take the portfolio of Minister of Finance. And in that event it is clear that the leader of the Opposition would have lots of trouble trying to reconcile his Finance Minister s free trade ideas with the protectionist ideas that have been given expression to by several hon. gentlemen sitting wi'th him to the left of the Speaker.
The hon. member for Brome in his whole two hours' speech did not indicate in any way how he would raise the revenue. He dealt only in generalities, and therefore I am at a loss to know how my bon. friends opposite, if they came into power, would propose to raise the necessary revenues. I trust that the leader of the Opposition when he speaks in this debate will not only let us know whether he adheres to the tariff policy adopted at the Liberal convention in August last, but that he will also enlighten this House and the country as to how he would raise the revenue if he and his party came into power.
I notice that the hon. member for Lunenburg (Mr. Duff) some time ago made a

speech before the Montreal Reform Club in which he differed considerably from the hon. member for Beauce (Mr. Beland) and the hon. member for Lambton (Mr. Pardee), both of whom had made protectionist speeches before the members of that club. The hon. member for Lunenburg did not do so. In his speech on that occasion he made the rather remarkable statement that there wias no difference between the underlying principles of the present Liberal policy and those of the United Farmers party. So there, again, we have a very marked difference of opinion among hon. gentlemen opposite as to what should be the tariff policy of the Liberal party.
The hon. member for Cape Breton North and Victoria (Mr. McKenzie) referring some time ago to the speech delivered at Quebec by the Minister of the Interior, to which I alluded a moment ago, said: "What a calamity it would be if a record of that speech was played on a gramophone at Calgary, what a commotion it would create out there." I would ask my hon. friend what kind of a commotion and impression it would create if a record of the speech of Sir Lomer Gouin to which I have referred was played in the city of Calgary.
The hon. member for Brome, who I .am sorry is not in his seat, felt very jubilant this afternoon. He challenged the Government to go to the country and was very confident that in such an event the Government would be defeated and that he and his friends would move over to the Treasury benches. I am afraid it was simply a case of the wish being father to the thought. He would indeed be a courageous man if he really wanted a general election now. Speaking for the Government-it has been said before, but I will state it again now- there is no reason why we should go tk>
the country until the full term Of this Parliament has expired. During my election campaign I never said anything about being elected only for the duration of the war, or that my service would end with the war. When the election comes, in due time, in the fall of 1922 or 1923-


Ernest Lapointe: Make it 1925.


Charles Colquhoun Ballantyne: -the issue is going to be a clear-cut one. The issue by which parties are going to stand or fall will be: Moderate protection versus free trade. I, for one, while I have no political ambitions whatever, have no fear what the verdict of the people will be on that issue when a general election comes. In all former

general elections that have been held in this country, any party that proposed to interfere seriously with the well-established fiscal policy of Canada met defeat at the polls, and if my hon. friend, the leader of the Opposition, thinks he can carry the country on the tariff resolution adopted at the Liberal convention, I can only say he misjudges the intelligence of the electorate of Canada. With the necessary publicity that will be given, I am satisfied when the people from one end of this country to the other come to decide between the policy of hon. gentlemen opposite and the policy which this Government stands for, namely, a policy of moderate protection, with favour to none and justice to all, framed for the diversified interests of Canada, a policy that is equally good for the farmer, the lumberman, the workingman, the fisherman and the manufacturer, I have no doubt, and this Government- has no doubt, what the verdict of the people of Canada will be. The Minister of Finance yesterday clearly set forth the Government's policy, and I desire to have the privilege of placing it on Hansard. He said:
Our policy calls for a thorough revision of the tariff with a view to the adoption of such reasonable measures as are necessary: (a) to assist in providing adequate revenues, (b) to stabilize legitimate industries and to encourage the establishment of new industries essential to the proper economic development of the nation-to the end that a proper and ever-increasing field of useful and remunerative employment be available for the nation's workers, (c) to develop to the fullest extent our natural resources, (d) to specially promote and increase trade with the Mother Country, the sister dominions and colonies and Crown dependencies, (e) to prevent the abuse of the tariff for the exploitation of the consumer-
That is the policy of the Government, and it has my full and unstinted support both in this House and outside of it.
Just a word with reference to our friends of the Agrarian group, sitting across the way. I am sorry my good friend the leader of that party, the hon. member for Marquette (Mr. Crerar), is not in his seat. There is one thing on which I can compliment the Agrarian group, the U. F. O., or whatever name the party is known by, and that is the very clear way in which they have given expression to their policy on many occasions during this session of the House.
The hon. member for Marquette and those who sit behind him are out and out free traders; they make no bones about that point'and I think they deserve our thanks and appreciation for the very clear exposi-

tion which they have given us of their policy. The hon. member for Assiniboia (Mr. Gould) when speaking in this House a few weeks ago was asked whether he believed in the policy of protection and he replied that he had never believed in protection, he did not believe in it then, and he never would believe in it. What could be clearer than that, Mr. [Speaker? We know exactly where the members of the Farmers' party stand. I find no fault with them because this is a free country and we are assembled in a free parliament. Every one in this country has a right to think as he pleases and to vote as he pleases, and it is every man's prerogative to stand by whatever policy he considers is best conducive to the welfare of the country. But I rather differ from my hon. farmer friends when they say that this free trade policy of theirs, this new progressive policy, so-called, is a sound policy for Canada. If they said it was a policy for the three Prairie Provinces and one peculiarly framed for their own interests, then I could agree with them; but when they assert that the free trade policy which they advocate is a good one for all of Canada's diversified interests, I confess I cannot follow them in their logic. How could a free trade policy maintain our great manufacturing industries that exist from one end of Canada to the other? How could it afford employment for hundreds of thousands of workmen throughout the length and breadth of this country.
And what good would a free trade policy be even to the farmers? If any policy in this country is framed to suit any one particular interest and that interest alone, it is a wrong policy and can have only one result. If the farmers are to be prosperous in this country, then the manufacturers, the business men, the workingmen and all other classes must live under a policy that grants special favours to none, and which is framed in the national interests and for the benefit of the whole people. The moderate protection policy that has prevailed in this country since 1867 has proved just such a policy. Suppose for a moment that we had a free trade policy in this country. Suppose our friends of the prairies produced vastly more grain than ever they did, but other interests in Canada were not prosperous; the people did not have money; the railways did not have freight to carry east-bound and westbound; and our grain growers found a lack of demand for the enormous amount of wheat they were growing, and found prices low-for all that would
follow a free trade policy-what would be the effect? The farmers would suffer with the rest. With all deference to my hon. friends, I am at a loss to know why, in a country like this, those gentlemen could purpose to put such a policy into effect if they had the opportunity to do so. The hon. member for Marquette, I will admit, modifies his policy very much according to the locality in which he happens to be speaking. He made a speech in this House a year ago and I have it here in Hansard. He said that the policy of protection was economically an unsound one, and he went on to say that he had recently travelled through the fair province of Ontario and had seen hundreds of farms, many of which were vacant, and this fact he attributed to the policy of protection. How he could come to such a conclusion is beyond my comprehension. Then later, when he was making a speech in the city of Toronto-a very strong protectionist city-he naturally modified his views. The leader of the Farmers' group on that occasion said, if I remember rightly: "I would not with one .fell swoop demolish the fiscal policy and all the industries of this country. I would prefer to let them die a slow lingering death. I would therefore bring about this end slowly, gradually, but surely." Well, if such a policy as that is ever to be put into practice, I for one should prefer the former manner of fiscal decease, so as to let the industries of the country be put out of existence with quick despatch.
Now, Mr. Speaker, I do not intend to take up the time of the House any longer. 'Once more I express my pleasure, as a member of the Government, at the Budget which has been presented, and if I may be permitted to do so, I extend my heartiest congratulations to the Minister of Finance (Sir Henry Drayton) for the splendid, comprehensive, fair and logical statement which he submitted to the House yesterday, and which is meeting with the general approval of the people of Canada.


Mr. W. K. BALDWIN (Stanstead):: Mr. Speaker, in the Budget Speech which the Minister of Finance delivered yesterday afternoon I observed that it was his intention not to get all the national milk, so to speak, from the same old cow. He has taxed the unnecessary things of life, he has taxed the slaves of fashion and the molly-coddles of the country, and in that respect I have no complaint to offer. There is one particular, however, in which I would have been very much interested had the minister taken very drastic measures.

I should have liked to see an enormous tax on American automobiles or automobiles coming from any other country. The automobile, in my opinion, has been the means of more injury in this country than any other invention of civilization. It has destroyed homes, and the worries which expensive automobiles have created have sent many a man to his last resting place, because he was nagged and harassed to such an extent, and his business pride was such, that he preferred to die physically rather than face financial death. No one but an acrobat is safe in crossing the streets now. You go to any garage in the country and you will find automobiles galore; and in many of them in the small towns you will find anywhere from twenty-five to seventy-five secondhand automobiles for sale. There is a perfect craze on the part of people to-day to go riding through the streets in burnished, shining vehicles. It is an appalling fact, Sir, and I hope our Finance Minister will consider this phase of the subject and see to it that no more expensive cars are brought into the country. There is a craze among the people to go running around in these glaring, death-dealing instruments.


Some hon. MEMBERS:: Hear, hear.


Willis Keith Baldwin: I see there is unanimity on that point, and there is no question about the truth of it. It is but too well known that people, even wise people, have a mania to spend their money foolishly, and the automobile is one of the chief sources of their extravagance.
I noticed that last night the right hon. the Minister of Trade and Commerce went so far as to say that my hon. friend from Shelburne and Queen's (Mr. Fielding) was inconsistent, comparing his present policy with his old time policy. Probably I am not quite as old as the two ex-Ministers of Finance but they isplayed a fellowship towards each other last evening which did my heart good. I believe that in a few years a new era will dawn on this country. But when the right hon. the Minister of Trade and Commerce claims that my hon. friend from Shelburne and Queen's is inconsistent I might remind him that he himself went to Washington in the eighties and the nineties to try to effect a treaty of reciprocity with the United States. On several occasions he went down there and was unsuccessful. On the last occasion that he and his colleagues went to Washington the Canadian delegates found that* the people who were to meet them had their bags
'Xlr. Baldwin.]
packed and they offered them the excuse that they were going on 9 southern trip. I think that what I say is exacitly correct. And so, the right hon. gentleman and his colleagues came home disheartened.
The question of reciprocity was not brought up again for a considerable time because the United States ignored all overtures until the time of President Taft. Then the United States had a vast population, 'they needed free natural products and free food. Naturally they had their eye on this half of the North American continent and they wanted free raw material. They made several overtures to Canada and pay hon. friend from Shelburne and Queen's ,was very properly sent to Washington to have a conference with the Americans. An agreement was prepared and the Canadian delegates came home. Instead of Sir Wilfrid Laurier, the great leader of the then Government of Canada putting that treaty into force at once he delayed in order to consult Parliament and in the meantime false representations, were put before the people by the press which declared that such a policy was disloyal and unpatriotic and that reciprocity with the United States would prove a dismal failure. But the present right hon. Minister of Trade and Commerce, as well as all the principal members of Sir John Macdonald's Government proclaimed throughout the wide country their feeling for reciprocity after that principle had been abrogated in the early sixties following the war of the rebellion in the United States. In the county that I represent, Sir John Macdonald spoke in favour of reciprocity in natural products and the Hon. C. C. Colby, who represented that county for about a quarter of a century always had as one of the planks of his platform reciprocity in natural products. Throughout the country they proclaimed that policy. I am sorry that the right hon. the Minister of Trade and Commerce is not in his seat because if he were I would point out to him how inconsistent he was in fighting the very policy which he had tried to consummate for many long years. It was the policy of the party that he followed, and which he continued to follow, except for the short interval when he was out of the House.
The hon. member who has just spoken (Mr. Ballantyne) says that we on this side of the House are willing to do nothing hut sit around and that we have no policy. I have never known in all the years of the Liberal party that a free trade policy was advocated. Alexander Mackenzie, Edward

Blake and Sir Wilfrid Laurier never proclaimed themselves in favour of an absolutely free trade policy. These leaders advocated a tariff for revenue. The right hon. the Minister of Trade and Commerce last night stated plainly that the hon. member for Shelburne and Queen's had championed a free trade policy. That is something new in Canada. It seems to me that the hon. member for Shelburne and Queen's said that no member of this House is willing to acknowledge that Canada has yet reached the stage when she could have free trade.
We must remember that Canada has a vast heritage to develop. She has great wealth in water-powers which are better than the black coal of the United States. At present tens of millions of capital are coming into the province of Quebec, towns are rapidly growing up, manufacturers are coming in large numbers and they are building plants now that will cost millions for the bricks and mofar alone without taking into consideration the working capital. We have a vast country here and as true Canadians we believe in its development. We know that under the present policy of the Government we cannot develop it without immigrants coming here to help us. This may be a suggestion to the hon. the Minister of the Interior (Mr. Meighen). He talks about a hand picked people only being allowed to come in. I disagree with him decidedly. I know, as other hon. members know, that approximately a million emigrants annually went into the United States for many years. They went forth, engaged in different spheres of activity and helped to develop the country. I believe that immigrants should be allowed to come to this country regardless of colour and that we should make such laws as would give them to understand before they come that we have no place for any who are not law abiding and do not wish to work. I have said before and I say it again that all crooks, shysters and loafers should be kept out of Canada. People who come to this country should be made to understand that they cannot loaf around, commit crimes, and play crooked games on the people. If that is made plain to all who may contemplate coming to Canada people of that class will not come and we will get a better type of settlers. We have tremendous resources. There has been no boosting in Canada. We are not boosters. Why is it that we have not a larger population? The House was yesterday reminded that the ex-Minister of Finance (Mr. White) said during his first Budget that about a thousand people a day were coming into
Canada. If the policy of Sir Wilfrid Laurier had been continued this country would now have had eleven or twelve million people. We know that the tide had turned before the war and that tens of thousands of people were leaving Canada in 1912-13. Then there came this horrible war that has given such a staggering blow to this country. But it has brought Canada to its senses and enabled here to see herself Canada played a part in the war that at one time we never thought she was capable of; she demonstrates the ingenuity, the sagacity and the strength of other people. Canada to-day stands at the point where we should all get together and, regardless of party politics, work for the good of the country. The time has gone by when members on one side should picture those on the other as being either manikins or brass monkeys. We should get together and develop this wonderful country. Take for instance the Georgian Bay Canal. There is enough water power on that system of canals and waterways to pay for the completion of the enterprise within a period of fifty, or possibly seventy-five years. The cost of developing hydro-electric works now is enormous, but before this stage was reached there was ample time for the Government of Canada to let contracts for the development of the Georgian Bay Canal by granting for a term of years the use of the water-power that might be developed. Does any one imagine that these contracts could now be awarded at the present time for anything like a reasonable figure? The same may be said of the project for the deepening of the St. Lawrence canals. These works, in view of the present enormous debt, would be a tremendous undertaking to-day. The way to rwith our obligations, as well as to develop our great natural resources, is not by working eight hours a day; we must take off our coats and work for ten hours a day or more. I happen to be one of the unorganized labour party that takes pleasure in working fifteen hours a day. That does not kill people; it is far more healthful than indulging in nonsense and all sorts of extravagant pleasures. I repeat that our great need to-day is to develop this wonderful country. In so saying I only wish that the Minister of Railways and the Minister of Marine were in their seats.


Hon. Mr. REID:: I am here.


Willis Keith Baldwin: I am sorry, but as the minister is not occupying his own seat he escaped my notice. Let me say to the hon. gentleman that we have not a mile too many

railways in Canada, nor a steamboat too many for the development of the country, if the rates on those railways were only raised to make them self-sustaining, and thus prevent the present and coming generations from being burdened with an enormous debt to make up the deficits. .


John Flaws Reid: If the hon. member
would address the farmers .at the other end of the Chamber and convert them to his idea it would make my task easier.


Willis Keith Baldwin: I believe in the system of bonusing as to which we heard expressions of opinion last night from the exMinister of Finance (Sir George Foster) and the hon. member for Shelburne and Queens (Mr. Fielding); it would doubtless bring about better results than some other policies that have heen advocated. It is ridiculous that a country of the tremendous extent and resources of Canada should only be mining five per cent of its deposits of iron ore. Can it be expected that we shall make a success of the development of this country if we do not use its great natural resources to the best advantage? Then there are vast areas of agricultural land which cannot be developed without labour, and how are we to get that labour unless we adopt a progressive immigration policy? True we are building up a great military machine to take care of those people in some of the provinces who are considered disloyal. In the province of Quebec we have no such elements in our population. The people there are willing to work ten hours a day. They are quite satisfied and have no use for travelling labour agitators; such men have no influence upon the people of that province or upon organized labour there. That is why immense capital for investment is flowing into the province of Quebec from Ontario, and from the United States and from other countries. Down there in the province of Quebec the people worship God and honour the King. Labour troubles are non-existent, and strikes are practically nil, but how different is the condition in other countries, for example in the United States, where strikes seem to be almost continuous.
With respect to the development of our railways we need money to link up the existing system, but the Minister of Railways seems afraid to make advances in the railway rates for fear the Canadian Pacific will enjoy the advantage of the increase. The Canadian Pacific got through its operations last year with the closest escape from a deficit, and surely it is a picayune idea that

we should retard the development of our National railways, and expose the country to a loss of many millions of dollars, because of the fear that the Canadian Pacific would benefit from any advance in rates that might be ordered.
The admission of Newfoundland to this Confederation would be a decidedly forward step. There was a possibility of Newfoundland entering Confederation when Sir Mackenzie Bowell was Premier of Canada, but it seemed likely to involve an additional expenditure of $8,000,000-which in those days was regarded as a great sum of money [DOT]-and the project fell through. What has the United' States done in the last fifty years? They have doubled their territory toy diplomacy, toy dollars, and by war. Would the Republic to the south part with any portion of its territory even if it were offered a million times more than it cost to acquire it? Possibly it .might in the case of the Phillipine Islands, but not with respect to another inch of its territory. In Canada unfortunately our people are not of a boasting type. We are losing our young men and our young women. We are not increasing in population at the rate we should in view of the fact that Canada is one of the greatest countries on the face of the earth and in area comprises half a continent. The people are becoming despondent, discouraged, and dissatisfied, and it is about time we became 'boosters for our country. One hon. gentleman raised the question of our doing business with the West Indian Islands. For my part, I think we should trade not only with the Mother Country, but with every other Dominion and Crown Colony in the British Empire in preference to any other part of the world. In order to avoid the rigours of the Canadian climate many of our people go to British Honduras, British Guiana, the Leeward Island's, Barbados, or 'the Bahamas. We could trade with the West Indies with advantage to ourselves, and I believe that trade would greatly develop with the progress of the years. I am of opinion that if we could win the admiration of the people of those islands we could win their trade, and if the West Indies were rnoTe closely united with Canada, both would benefit to a surprising degree. The Government should send to the West Indies to promote trade relations men endowed with boundless enthusiasm. I understand that delegates are coming here from the West Indies about the last of this month. Let us show these delegates that it would be a good thing for them to become more closely acquainted with this great country and its wonderful possibilities. I

hope the time will come when commercial union between Canada and the West Indies will be something more than a dream. I hope that we can win the admiration of the West Indies. I do not believe in war, but as one of the results of the war England has acquired a German colony of nearly as extensive an area as Canada, and, therefore, I think that this country deserves some consideration as well. I believe that a mutual agreement with the Imperial Government and the Crown colony of the great Caribbean sea might bring about a rounding out of this great Dominion. "Procrastination is the thief of time," and to-day when the United States are advocating that Great Britain sell those islands to the United States, it is about time for us to wake up. Even one of the prospective presidential candidates, Mr. McAdoo, has brought that subject before the people of the United States. If those islands were sold by England to liquidate her indebtedness to the United States, where would Canada be?
I am not a believer in sentiment, on the ccnnary, I am a believer in hard and fast business principles; but sometimes sentiment is a prevailing factor, and we should cultivate in our sons and daughters the sentiment that Canada is one of the best located countries on the face of the earth, with natural wealth beyond all comprehension, and so stimulate that patriotic pride which means so much in the development of any country. And with that sentiment properly cultivated, I believe that our future is assured.
If we succeed in bringing the West Indies into this great Confederation, the resultant advantages will be great indeed. Instead of depending on our neighbours to the South for the products of those islands our own mercantile marine will bring them direct to our Atlantic ports, and by means of our great inland waterways we shall be able to reach the markets not only of our own provinces but the markets to the South and be able to compete with the Americans in their home cities of Buffalo, Erie, Cincinnati, Toledo, Detroit, Chicago, Milwaukee and Duluth. But if we continue to proscrastinate I am afraid that this Parliament instead of being praised by our people will be cursed.
I feel assured that the people of the West India Islands would be proud to belong to a nation of such vast resources as we possess. They need our products, and we need theirs, and there would be a constant interchange of traffic. They will never be manufacturing centres, but we are certain to become one of the greatest workshops of the world-although our development along that line has so far been slow. However, I think the dawn of a new day is awaiting us, and I sincerely hope that party politics will stop for a while until the people of Canada come to a realization of what vast possibilities are within their reach.
I claim that every product of a tropical character that we need here can be raised in the West Indies, and that emphasizes the importance of a mutually satisfactory arrangement being reached for their becoming part and parcel of this wonderful Confederation. From cotton down to the smallest tropical fruits would it not be a glorious thought for the householders of this country if they could send their children to get Canadian tropical products at the stores? Under our present trade relations with the United States that country holds Canada in one hand and the islands in the other; she discounts their money 41 per cent, she discounts ours from 10 to 15 per cent, and as a result she gains $30,000,000 in handling the products of the West Indies and selling them to Canada. Is it not ridiculous?
With this condition of affairs, is it not time that we ceased fighting over things that should not excite controversy? Because, as I said in my opening remarks, when two great finance ministers of experience get together in kindly fellowship there is a future for Canada that will make this one of the greatest countries upon this earth.
Our country is so vast that we have lost ourselves. There was a time when we used to hear about patriotism-people were proud of tne fact that they belonged to a country on which the sun never set. Love of country? We hear nothing more of it. We have gone far astray, and, like the lost tribes of Israel, we are wandering aimlessly. But it is time that we drew ourselves together. The people in the northern part of the United States are like ourselves, strong and vigorous, and their country is connected with the West Indies by a shipping service which gives her a predominant advantage. Already the United States owns Porto Eico; she has a protectorate over Cuba; she now has her customs officers in San Domingo.
What I am proposing would be a perfectly safe proceeding. It would not have the uncertainty of reaching out into the Orient;

it is a solid, straightforward business proposition. Our people should visit the West Indies and learn the requirements of their inhabitants instead of spending their money in the United States. Some yeaTs ego in the United States they started the slogan: "Look around your own country"; and since the war they have supplemented that with actually learning that they have a wonderful country. Do Canadians know their own country? I would advise the people of this city if they want a real holiday this summer to go right up into the woods, and they will discover that we have bench lands along the rivers-I am speak-more particularly of the province of Quebec -where millions of people could get their livelihood. I have seen thousands of acres red with wild berries-literally thousands of tons of them, which if they could be gathered would return sufficient to pay the interest on our national debt. We have a wonderful country. Too many think that in Canada there are vast ice-bound regions incapable of production, but those who entertain that view are vastly mistaken. Canada is a country which is capable of producing a strong and vigorous race. Yet we find that hundreds of people have left our country and gone to the United States. Just so soon as Canada does the things it should do; just so soon as this House takes steps towards the progressive development of our country, these persons who have left our shores will return to us. It is a crying shame that such a vast country as Canada should stand where it stands to-day for want of patriotism, for want of love of country, for want of boosting. I do urge the people of Canada; I do urge those who are in authority, to make a move toward the development of this wonderful country, with its possibilities-shall I say for I believe it-of maintaining hundreds of millions of people.
At six o'clock the House took recess.
After Recess.
The House resumed at Eight o'clock.


Mr. ROBERT JAMES MANION (Fort William and Rainy River):: Mr. Speaker, I do-not intend to deal at any length at all with the remarks of the previous speakers on the Opposition side who have taken part in this debate. One of the reasons is that it would take, I fear, a tariff acrobat to deal with them all, for the reason that in the first place the hon. member for Brome (Mr. McMaster) this afternoon took 
an absolute free trade stand, though I think he soft-pedalled slightly compared with previous orations. Then the hon. member for Shelburne and Queen's (Mr. Fielding) took a moderate protectionist stand, and I understand my hon. friend from Stanstead (Mr. Baldwin) to take a protectionist stand. I find myself wondering, after thinking that over, if the Agrarian members of the House decide to accept the invitation of the hon. member for Shelburne and Queen's, which of those three constituencies they would come in through. I thought the criticisms of the Opposition speakers were tempered with mercy. In fact, I thought the criticisms of the hon. member for Stanstead were so tempered with mercy that they were almost a paeon of praise to the Minister of Finance. There is one statement the hon. member for Brome made- and I do not say this in any unkind way -with which I thoroughly agree, and that was his statement that the verses which he quoted were rather of an ordinary type. I do not use the word he used, because he might misconstrue it; I think he said of a low type. I think they were at least of an ordinary type.
So far as the three speakers thus far on the Opposition side are concerned, I found myself agreeing to a great extent with the hon. member for Shelburne and Queen's. I feel after having listened for a long time, during four sessions, in this House to debates on the tariff question that no subject in Canada to-day is of more importance than the tariff question. It is not only a question upon which political parties are dividing, but a question in which everybody in this country is taking an interest. It is a question the solution of which is very important to the best interests of Canada. I am not of the farmers, on the one side, or of the manufacturers on the other. I am of that large body of Canadian citizens who belong to neither class, and it might be interesting to place on Hansard the figures as to how many people there are in each of the different classes. According to the census of 1911 the total number of people employed in the different occupations in Canada was 2,723,000 in round figures, and I shall deal only in round figures for the reason that extended figures are rather dreary reading. Of this number the agricultural employees amounted to 933,000, or 34 per cent; manufacturing employees, 491,000, or 18 per cent. All the rest, 1,294,000, or 48 per cent, were of the working population of this country. That 48 per cent includes building trades,

domestic servants, civil servants, professional men, fisheries and forestry, trade and transportation. That 48 per cent, or nearly one-half of the working population of this country, are in danger of being ground between the upper and nether millstones of free trade and protection and that is my reason for speaking here to-day more or less on behalf of that 48 per cent of which I am a member. Belonging to that class, I feel I can look at the question dispassionately, as I have no direct interest in the matter, the only interest I possess being a desire to get the best policy for the betterment and advancement of Canada. I do not want to be misunderstood as trying to prove that free trade as a theory or as a principle is wrong. In that I believe I can fully agree with the hon. member for Shelburne and Queen's when he said that in theory he was a free trader, but in practice, as I understood him-certainly he implied that-he did not believe in it. To the free traders of this country I presume that is a little bit like what doctors say occasionally "Though the operation was a success, the patient died." Sometimes, no doubt, the patient would prefer the operation to have been not quite so successful.
It would appear to me that Canada must take into consideration not theories, not principles, but actual conditions and facts as they are, and two of these important facts which must be taken into consideration are these: First, just to the South of us we have that immense American republic, the United States, which has a very high industrial development, and with the industries of which our industries must compete. Even if we had free trade in Canada, it would not necessarily mean that they would have free trade in the United States; in other words, our industries would have to compete in a free trade market with the industries of the United States in a protected market. Secondly, we are to the East of the teeming millions of Asia, with low wages and low living conditions, both wages and living conditions being on a very much lower scale than we believe in. So while we might desire the ideal of free trade, while we might desire to lay aside what some people might call the selfish national policy of tariffs, should we be so altruistic as to desire the progress and prosperity of other nations as much as we desire the progress and prosperity of our own? In addition to that, free traders both in this House and outside have been in the habit of making comparisons with conditions in free trade countries, particularly England. They have been making promises to Canada based, no doubt-in fact, it must be-upon the conditions in free trade England. I feel that a clear statement of the facts and a clear statement of comparisons, not with ' the object in view of disproving the theory of free trade, but of paving the way for a fair consideration of this subject on behalf of Canada, would be apropos here to-day, and that is what I intend to attempt; because after careful thought and consideration it appears to me that the moderate tariff course is the wise course for this country to follow. We should go neither to the extreme of free traders, knocking down all tariff walls, or to the protectionist extreme of placing a Chinese wall around this country which would bar out the goods of all other countries. It is not sufficient today to merely state one's conclusions. It is necessary to offer reasons for the faith that is in one. It has appeared to me that too often those who take the same stand as I do, and I think the vast majority of the members of this House have taken that stand, have taken it, some of us, at least, in an apologetic way. We have allowed free traders to try and prove their theories with theories and their facts with theories, and have not often enough insisted that they prove their theories with facts. I admit that the academic question of the tariff is more easily upheld on the free trade side, but facts are stubborn things, and it is facts I intend to deal with.
In the first place, if free trade- is a panacea for all the ills that nations are heir to, how is it that England which adopted it in 1846 is the only great nation of the world that has adopted it? Italy, Spain, Germany, France, Austria-Hungary, the United States-none of these great nations have considered free trade worth while adopting. Even the overseas Dominions of the Empire, with one small exception, have not considered it worth while to copy the methods oi the Mother Country. Cobden's prophesy that if England adopted free trade, in ten years free trade would be universal, is a long distance from being fulfilled. In England itself there is a large body of protection opinion. The other day I made it my business to look over three shelves of books, in the Library dealing with tariff questions, and of forty distinct works by English writers twelve were in favour of protection. So I think I am correct in saying that there is a large body of opinion in England-and we know there is even amongst politicians in England-favourable



would be regarded here as necessaries of life. And the embargo against Canadian cattle entering the United Kingdom, is thinly disguised as a health measure, but it is as a matter of fact nothing more nor less than a protection for the cattle growers of the United Kingdom. The steamship subsidies which are paid by England for mail carrying are also claimed to be in the shape of a subsidy for the home trade, for the foreign steamship companies claim they have no chance of getting the subsidies even if they tender lowest. In other words, England insists on giving the contracts to her own people even if they are higher than the tenders offered by foreign companies. In 1917-18 the customs and excise in England brought in a revenue of $550,000,000; in 1918-19 the estimated revenue was $740,000,000; and this year, according 'to the speech of Mr. Austin Chamberlain reported in the London Times, the figure is $1,500,000,000. I admit that in that figure there are included in excise some duties which we do not impose here, but if you subtract even a great deal from that, you would have a greater income per capita for customs and excise in the United Kingdom than in Canada. So that England is not entirely free trade.
But in Canada, when any one takes the stand I am taking in favour of a moderate tariff policy, some free trader demands that the position should be carried to its "logical conclusion" and suggestions are made about barriers between one province and another and between one district and another, and between one city and another.
That is a favourite argument of free traders. You find it in all the books on the subject. Even that grand old man ol British politics, Mr. Gladstone, used it in a debate with an American. It would be rather strange if we could not answer that question because the answer is very easy. The answer is that to carry protection to such a conclusion would be to carry it to an illogical conclusion. It would be like saying that if a slice of old English bee: is good for your dinner, you should eat a whole ox; or if a thirtieth of a grain of strychnine or an ounce of brandy is good for a failing heart, why do you not give a pound of strychnine or a keg of brandy?


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: 
John Flaws Reid: Would the hon. gentle-I man give us a few of the items on the free list, in the United States? It will be very interesting to the House.


Robert James Manion: Yes, I will be pleased to. I only asked for a certain list of goods and out of the list I received I can give a great many more dutiable items, but I do not wish to clutter up Hansard. Amongst the goods admitted free into the United States are eggs, poultry, boots and shoes, meats, cement, coal, tea, coffee, leather goods, agricultural implements, lumber and films. These are the goods I asked about. I am pointing out that in the United States there are many necessaries of life that aTe dutiable. I am not in any way trying to disagree with anybody and my only object in quoting these figures is to prove that the United States is not a free trade country .
Now, let us look a little further into the question of the foreign commerce of the United States, Germany and the United Kingdom. I think I can say without fear of contradiction that before the war the United States and Germany were rapidly gaining, under a protective tariff, on the foreign commerce of the United Kingdom. I am going to give figures to show that in that assumption I am correct. In the

try in the world; and Mr. Hill said that even the railway wages in Germany were higher than those in Great Britain.
Let us make another comparison, this time in regard to pauperism or abject poverty. In 1914, 761,000 paupers were relieved in England and Wales under the Poor Laws; in 1910-I could not get the same year, but I do not think it makes any material difference-84,000 paupers were relieved in the United States, or one-tenth the number with two and one-half times the population of England and Wales. In 1913 in the United Kingdom $89,000,000 was spent on poor relief; I have no records for Germany since 1885, but J. Ellis Barker, whom I have already quoted, in his "Modern Germany" says that there is much more pauperism in England than in Germany.
It has been suggested that comparison between the United Kingdom and the United States are unfair, because of the larger area, greater population, and immense natural resources of the United States. I admit that there is a good deal of truth in that criticism. But, Sir, if after a fair examination we find that the people of England following sixty years of free trade are not on an equal plane with the people of the United States under protection, then Canada being so much similar to the United States in area, in natural resources,-in minerals, fisheries, lumber and all those things, almost in climate except tropically, might it not be much wiser to copy the methods of the United States- probably that will be an unpopular expression-to consider the methods of the United States rather than those of some European country absolutely unlike Canada. At any rate, free trade exists only in England, therefore comparisons cannot be made with any other free trade country of importance.
Let us take other comparisons, for instance, agriculture. How has it stood the test of free trade in England? All hon. members know that the free traders of England are the manufacturers, and that the piotectionists are the farmers; the reverse of what obtains in Canada. The reason is th 't the farmers have seen agriculture deteriorating so rapidly in England. And I am not going to let it go at that; I am going to give my proofs. England imports most of her foodstuffs. In 1913 she imported 215,000,000 bushels of wheat and grew only 57,000,000 bushels, or only one-fifth of her needs. It might be argued that the size of the United Kingom is the reason for the small amount of acreage there under wheat; but the fact is, Sir, that France, Italy, Ger-

many, Austria, and even Spain greatly surpassed her in wheat production. Taking the wheat production of the world in 1913, I find these figures given-and I am leaving out any Asiatic countries, because it is not important to my argument to consider their production; Russia grew 814,000,000 bushels; the United States, 763,000,000 bushels; France, 319,000,000 bushels; Canada, 232,000,000 bushels; Austria-Hungary, 230,000,000 bushels; Italy, 214,000,000 bushels; Germany, 171,000,000 bushels; Spain, 112,000,000 bushels; United Kingdom, 57,000,000 bushels, or half that of Spain, exactly one third that of Germany, a quarter that of Italy, and about one-sixth that of France. I may say, Sir, that those figures are given from the Blue Books of our Department of Trade and Commerce so they are authoritative. So far as oats and barley are concerned, while the figures are not so strongly against England, they are nearly in the same ratio.
England imports 50 per cent of her foodstuffs, and is almost wholly dependent on the outside world in that respect; but before the war Germany raised 90 per cent of her foods, and France 100,000,000 bushels more wheat than we did in this immense country. Therefore England suffers by comparison in agriculture with practically all the European countries.
What a contrast, Mr. Speaker, in the United States, where under protection since 1861-I say under protection, not because of protection-the agricultural states of the west have grown rich, prosperous and populous, selling 90 per cent of their crops in their home market. The production of the wealth of the farms in the United States-and this statement is from the statistics published by the United States Government-including crops and livestock was in 1880, $2,000,000,000; in 1900, $5,000,000,000; in 1910, $9,000,000,000; in 1918, $21,000,000,000. The value of farm property in the United States, including land, buildings, stock and so on, increased 150 per cent in the twenty years from 1890 to 1910 -from $16,000,000,000 to $41,000,000,000.
It seems to me, Sir, that the extreme farmer might well ponder over those figures before demanding a change in the fiscal policy of this country.
Rather strangely the argument has been advanced that protection is immoral, but anybody who has visited these various countries will not claim, I think, that free trade has had any particularly elevating effect on England; I do not imagine that any one will claim that England is more

moral than for example the countries on this side of the water.
Then, Sir, will a free trade policy develop our natural resources? Undoubtedly we need their development very much. What about our pulp wood, for instance? Under free trade there would be none of these provincial restrictions which exist to-day, and the raw pulp wood would go out to feed the pulp and paper mills of the United States, and our pulp wood resources would soon be exhausted.


Mr. VIEN:: Will my learned friend allow me a question? A federal policy of free trade or of protection has, to my mind, nothing to do with the export duties imposed by the provincial authorities; and I would like to hear my hon. friend inform us how a change in policy from protection to free trade would affect those export duties.


Robert James Manion: I know what my hon. friend's point is as well as he does, that the restrictions imposed by the provinces are not restrictions imposed by the Dominion, and therefore can hardly be taken into account in discussing our tariff policy. But I ask my hon. friend can he prove that they are not restrictions just the same? The only point I am making is that under free trade you would not have restrictions. I admit my hon. friend's point; I think he will admit mine.


Mr. STEVENS:: Export duties imposed by Liberal Provincial Governments.


Robert James Manion: Are not those figures to conjure with, Mr. Speaker?
I can go a little further, and although I do not like to- tire the House with figures, I cannot refrain from citing these statistics with regard to tin-plate imports into the United States in 1890 before restrictions were imposed. The importation of tin plates to the United States in 1890 amounted to 680,000,000 pounds, and twenty years later, in 1913, that was reduced to 28,000,000 pounds, due to protective policy. Tin-plate manufacturing in the United States amounted in 1890 to 2,000,000 pounds, and twenty-three years later, in 1913, had increased to
2.000.	000.000 ipounds. From 1880 to 1917 the production of natural gas in the United States increased from $215,000 to $140,000,000; of lead from 100,000 tons to 600,000 tons; of copper from 27,000 tons to 840,000 tons; of cement, from 2,000,000 barrels to 91,000,000 barrels. The production of corn increased from 1,700,000,000 bushels in 1880 to 3,000,000,000 bushels in 1917; of cotton, from 6,000,000 bales to 11,000,000 bales; cotton manufactures from $192,000,000 in 1880 to $701,000,000 in 1914; production of phosphate rock from 200,000 tons to 2,500,000 tons; of zinc, from 23,000 tons to 584,000 tons. The export of manufactured cotton increased from $10,000,000 in 1880 to $136,000,000 in 1917. The production of wheat nearly doubled in the same period, and the national wealth increased from $43,000,000,000 in 1880 to $187,000,000,000 in 1912. These figures may be of use on another occasion.
I might also point out-I am not going to put details of these figures on Hansard- that in the production of coal, iron ore, pig-iron and steel, the United States and Germany in some cases surpassed the United Kingdom, though they started away behind her. For example, in the production of coal the United Kingdom, starting with
186.000.	000 tons in 1890, increased to 270,000,000 tons in 1911, while the United States starting with 148,000,000 tons, increased in the same period to 427,000,000 tons; that is, it started behind, but almost doubled the production in the United Kingdom in 1911. Germany, starting with a lower production than the United Kingdom in 1890, almost reached the same point as England in 1911. In the production of iron ore the United States and Germany surpassed the production of the United Kingdom in 1911, though they started equal in 1890, the United States producing in 1911 three times as much as the United Kingdom, and Germany nearly twice as much. France was about equal in iron ore production to the United Kingdom, although it started behind in 1890. In the

production of pig-iron the United States and Germany surpassed the United Kingdom in 1911, though they started about equal (Germany behind) in 1890, France also gained more rapidly than England in the same period. In the production of steel the United States was producing over three times as much as the United Kingdom in 1911, and Germany twice as much, though they started equally in 1890. France also gained very rapidly. The reason I mention those four materials is that they are the basic elements of commercial progress. In the production .of these four different materials the United States and Germany surpassed the United Kingdom in many instances, and in others were gaining very rapidly.
Then there is this argument: that a moderate tariff brings about a -more diversified national life, because it produces greater opportunities to the youth of our land and prevents their exodus to the United States. There is no class of our people in the Dominion who profit more by that fact than the ambitious sons of the farmers of this country, and even if on occasions internal competition does not cut down the prices of materials quite so low as we might wish, is not a complete national development worth something? Do we wish to be simply producers of food and raw materials, simply hewers of wood and drawers of water to the other nations of the world?
We have immense taxes, due to the war, and it is doubtful if we can raise them by the direct method. History shows that every country after a great war has increased its custom-s to a certain extent.
I have not used the argument that we have to compete with cheap Japanese and Chinese labour, nor the quite logical argument as to the specialization in manufacturing in the United States. In other words, if Canadian manufacturers are forced to compete in an open market with American manufacturers in a protected market, and Canadians cannot specialize so greatly, they will be driven out of business in this country. They wrould no longer manufacture to a population of 8,000,000 or 9,000,000, but would go to the United States and manufacture to a population of 110,000,000. I think I have touched most of the important aspects of the life of a people. I have touched on home and foreign markets, agriculture, transportation rates, general taxes, pauperism, foreign commerce, development of our national resources, a diversified national life, and the general well-being of the people; and I have shown that the

people of England are not on an equal plane in most of them with the people of the United States, and in some of them are not on an equal plane with the people of Germany and France. I do not state that protection is the cause of all this. No one cause can be assigned for the progress, or the reverse, of any nation. Contributing circumstances must be taken into account. But if in sixty years free trade England has not succeeded in improving the condition of her people as much as has the United States in the same period, why should we adopt a free trade policy? Certainly the facts in the situation are against free trade. Then why should Canada embark on such a policy? Is it merely because it is claimed by some to be a panacea for all the ills that nations are heir to? Or is it merely to try out the theories of the hon. member for Bed Deer (Mr. M. Clark) and the hon. member for Brome (Mr. McMaster)? Suppose we admit that the conditions of the masses of the people did improve very much in England after 1846; that statement can be made truthfully of every other civilized country. Through invention and science alone much was accomplished. But despite its great population the United States leads the world. Protection in United States began in 1861, when that country had a population of 31,000,000. Now its population is
110,000,000, and in general prosperity, developed natural resources, real wages, social condition of her people, general comfort and opportunities in life, the United States is ahead of any other country. Can a parallel be found in the history of the world? I think that an answer may unhesitatingly and unqualifiedly be made in the negative. United States has two and a half times the population of the United Kingdom, twice the national income and two or three times the accumulated national wealth;-I believe that these figures are too conservative. The argument is sometimes put forward by free traders that the United States would be better off under free trade. But, Sir, that is only a speculation, and a very unlikely speculation. One would be just as fully justified in saying that the United States would have failed miserably under free trade. It is not necessary to say that now with her great amassed wealth and with her developed industries, it might he wise for the United States gradually to adopt free trade. In fact, one might easily conclude so. But her early commercial history may be looked upon, it seems to me, as a perfectly good
model for Canada. Our progress has been slow in comparison; but should we experiment on account of that? Mr. Blaine during the course of a controversy with Mr. Gladstone, made a statement in 1896 which was published in the North American Review and which is in the library of Parliament in book form, in which he said that between 1812 and 1861 the United States tried free trade three times, and the result was recurring panics and depression; but that since 1861 the progress and prosperity of the country had been rapid and continuous. Therefore, Sir, we have the strongest arguments against experiments in the history and commercial conditions of United States which, I repeat, in area, resources and minerals is more like Canada than is any European country. Is it not desirable for us to profit by the example of the early commercial history of the United States?
Let us take all these things into account, and also the fact that forty-eight per cent of the people of this country are neither farmers nor manufacturers, and wish only the adoption of a policy which will be the best for Canada's development. I believe you will agree, Mr. Speaker, that the majority of the people of this country, of whatever political party, favour a moderate tariff policy, neither going to free trade extreme on the one hand nor the too high protectionist extreme on the other, by which too high protectionist extreme a group of men may exploit the people and subject them to overcharges. Of course, that is not to say that the present tariff policy must not be maintained as it is. The Minister of Finance has promised a scientific revision of the tariff, as was promised last year. It is not so difficult to understand that the revision that was promised last year was a little difficult to accomplish. Anyway, the Minister of Finance has promised this revision, and I think the House may certainly expect a revision by next year. I believe that tariff revision is very badly needed, but to say that is far from saying that free .trade would be the proper policy for this country. The members of this House are fairly representative, I think, of the people of this country, and certainly the representatives on either side of the House are not leaning towards the free trade extreme. Neither of the old parties has shown any tendency toward that extreme. The hon. member for Shelburne and Queen's who is, I think, a pretty fair spokesman for the party opposite, does not show any inclination to take to it at the present

time. If divisions in parties are based alone upon the tariff, then I think the supposed difference between the present Liberal Opposition and the present Unionist party is a very artificial difference. Therefore, as a dispassionate observer I believe that the just and proper course would be co-operation between the moderate people of the three great groups, farmers, manufacturers and labourites, the latter including the forty-eight per cent outside of the farmers and manufacturers. I believe that if these groups work together along moderate tariff lines fixing as low duties as possible on the necessaries of life, on raw materials, and on the instruments of production, the result will be the bringing about of the greatest good to the greatest number and the building up in the Northern half of this continent of a great, prosperous, united, freedom-loving people.


Mr. THEODORE OERVAIS (Berthier):: (Translation). Mr. Speaker, allow me, at the very outset of the few remarks I am about to make, to congratulate the hon. Minister of Finance (Sir Henry Drayton) upon the clear and precise manner in which he delivered yesterday, what it is agreed to call, in parliamentary language, the Budget Speech. Conscious of the responsibility devolving upon me as one of the mandatories of this country, I wish to express my opinion freely, according to the dictates of my awn conscience, while remaining a loyal subject of the loyal opposition of His Majesty. In the course of a protracted debate which took place last year under similar circumstances, I had heard the hon. member for Shelburne and Queen's (Mr. Fielding) state that, though he did not intend to prolong the debate, still he thought it was in the interest of the country that the discussion should be continued, as this was a means of finding out the opinions of each of the members representing the different parts of the Dominion. I do not wish to protract this debate either, but I do wish to explain my position, to express my opinion on the Government's policy, as well as on the Liberal platform laid down at the convention which took place in August last, and on the amendment now submitted to the House.
The country has passed through a terrible crisis; the war brought the Government face to face with many new problems, but this land never experienced social unrest in the same degree to which we are witnessing it to-day, in practically no part of the world was there ever seen such a social upheaval as that which has followed

in the wake of the economic disturbance brought about by the war -and which instead of lessening seems to gain in strength as time goes on.
What are the oauses of this social unrest which finds expression in numerous and ever recurrent strikes, in popular movements which, at times, border on sedition, giving rise tot popular clamour of every description and apprising us of the existence in the different classes of society of a ferment which threatens to destroy not alone the social equilibrium of this country but the economic equilibrium as well?
I believe, Mr. Speaker, that these causes are both deep-rooted and remote; I hold that the economic system which has been established for years in this country is one of the main causes of this social unrest we are witnessing to-day and about which the hon. Minister of Trade and- Commerce (Sir George Foster) asked us yesterday to remain silent while knuckling down to the task of production. Furthermore I hold that these causes are remote. As I- said a moment- ago the war saw colossal fortunes- piled up in this country; but even before the advent of war certain classes- of our citizens- enjoyed special privileges and that was, I believe, one of the conditions responsible for social unrest. The main cause of the trouble is -found, it appears to me, in the fact that instead of recognizing agriculture as the basic industry of this country we have been too considerate of our manufacturing interests, afforded them too much protection.
The hon. member who has just taken his seat gave us a wonderful description of the situation that- obtains in this country to-day. He gave us some very interesting statistics but he forgot, I fear, to -acquaint the House -and I regret that he does not understand what I -am saying-with one of the chief facts of the case. When the hon. member for Fort William was explaining his attitude and -revealing himself in the colours of a moderate protectionist he forgot, ih his comparisons between Germany, England and United States, to mention the respective populations of these countries.
Mr. Speaker, the United States are almost -a world unto themselves, compared to England; Germany also has a much larger territory than England. The United -States have a poulation of 110,000,000, Germany, 70,000,000 and the population of England, so far as I know, does not reach 50,000,000. I haven't the statistics here -and I make no claim to infallibility, but before

the war I was a close student of the commercial activity of these countries and, as a British subject I was proud of the fact that England, the smallest in respect of population, the smallest, in respect of territory, surpassed, in volume of trade, such countries as the United States and Germany; England's trade was greater than that of the United States despite the fact that the United States had two and ia half times the population and four or five the territorial expanse of England.
In my youth whenever I used to hear public men speaking of free trade and protection. I was rather inclined* to be an unreserved free trader since I was enamoured of big ideas; I considered that protection penalized trade. Having had occasion, later on, to become better acquainted with public affairs, I realize today that the economic system of this country should be grounded on free trade while at the same time granting to every industry the measure of protection necessary for the . fostering of that industry.
I am astonished that the hon. member for Fort William should proclaim himself a moderate protectionist and should then express approval of the Budget brought down by the Finance Minister yesterday when that Budget puts a tax as high as 50 per cent on some articles. I wonder just how stiff a tax would be necessary to convince the hon. member that the tariff was rather high. In his opinion this Budget gives moderate protection. I might tell my hon. friend and colleague that since he changed parties, since he entered the Unionist fold, his views have perhaps undergone a change.
The question of protection and free trade is an old question. As I said before, Mr. Speaker. I have practically grown up in the study of this question. This Canada of ours enjoyed prosperity from 1854 to 1866. At that time we had a reciprocity agreement with the United States, but the United States, dissatisfied with our attitude during the Civil War, withdrew from the agreement. In 1878 Sir John Macdonald inaugurated the National Policy. Our country had j ust entered upon its development; Confederation was in its early stages and the country's industries were just beginning to get a foothold. Elected to office the Liberal party in 1897, made a substantial reduction in the tariff the following year and relieved the people to that extent. With what regret Mr. Speaker, the people of this country recall the days of peace and plenty which blessed Canada under the Liberal Administration, which lasted from 1896 to 1911, fifteen years of peace, of social well-being and of material prosperity without precedent in the annals not only of this, but of any other country.
In 1911 things took a new turn in Canada; the Liberal party, consistent with the doctrine it had always held, sought to give a new impetus to agriculutre, realizing that the greatness and prosperity of this country can only be brought about by the development of agriculture. In a treaty negotiated at Washington by the Finance Minister, the Government of the day made certain concessions, took a step in the direction of free trade. But you are as well aware as I of the turn affairs took in Canada at that time. A powerful association sprung up wielding its influence throughout the country. The voters, it seemed, were not entitled to concern themselves with what the Manufacturers' Association considered its own particular affair. The association waged a war to the death against reciprocity with the result that the former Government went down to defeat and the affairs of the country passed into the hands of a party which, up to that time had espoused the doctrine of protection rather than free trade. What wa's the consequence of this ohange, Mt. Speaker? On reading to-day the speech delivered yesterday by the hon. Minister of Finance, I find the practical confirmation of what I said: the total agricultural production in 1910 (page 2555 of the unrevised debates for the 18t.h May, in the speech of the hon. Minister of Finance) amounted to $663,000,000 in round figures; in 1919 it reached $1,975,000,000, an increase in twelve years of $1,312,000,000, an average gain of $145,000,000 per year. So much for our farm produce. Now let us consult the figures for our manufactured products. In the statistics he gave the House yesterday the Finance Minister did not choose, for his comparison, the same years as in the case of agriculture.
In 1906 our manufactured products were valued at $718,000,000; eleven years later, in 1917, they had attained $3,015,000,000 in value, an increase of $2,297,000,000 in eleven years, a yearly average of $208,000,000. So we find that agricultural products increased, on an average; $145,000,000 in value each year while our manufactured products jumped in value $208,000,000 every twelve months.
I believe the present Government has failed to take sufficient interest in the mainspring of this country's development; that it has been too lavish in its favour to a certain class and too niggardly in this respect

towards agriculture. The building of tremendous fortunes both during the war and even prior to the war, thanks to our high tariff wall, is probably one of the causes of the social unrest I was referring to a moment ago.
I would ask each and every member in this House who enjoys the advantage of being conversant with the language in which I have chosen to express my opinions on this matter, even my hon. friend from Brome (Mr. MoMaster) whom the hon. member for Fort William classed as a free trader, to make the following comparison:	take a farmer in your district
whose holding is valued at $10,000 and who tills his soil with the assistance of his son; after ten years of hard work, when this man has raised his family, what will his investment of $10,000 be worth? The answer is easy; it will still represent $10,000. Take $10,000 to-day and invest it in a factory; in ten years your factory will be worth $100,000. Agriculture has not kept pace with the manufacturing industry of this country.
We hear the complaint, Mr. Speaker, that our country districts are becoming depopulated; but everything has 'been done to draw people to the cities. The farmers are asked to increase production-for, after all, the law of supply and demand is responsible for the high cost of living-the farmers are asked to increase production but in order to do that they must have more help; besides up to these last few.years agriculture was far from being remunerative in 'this country.
In my opening remarks-and I was sincere-I had the pleasure of congratulating the hon. Minister of Finance; last year and up to the present time I had an opportunity of admiring his predecessor. When I first came into the House I listened with pleasure to the Budget Speech delivered by the Hon. Sir Thomas White and each year it was with renewed pleasure that I listened to him when he made his address to the House.
With our prosperity tumbling and millions being thrown away I used to admire the former minister, and I admire the present minister; however, I recall the ancient myth of the Danaides who by their father's order, were condemned to go on forever pouring water into a broken cistern. The present hon. Minister of Finance seems like his predecessor, condemned to constantly fill the public treasury vaults while his colleagues as constantly go on spending in the most thoughtless way. A deficit of $47,000.-
tMr. Gervais.]
000 from our railroads; the building of a merchant marine, the profitable operation of which is open to question; millions spent-right and left; an overburdened Budget. The member of former days will not recognize the Parliament of Canada for 1920; all the more reason for admiring the efforts of the hon. Minister of Finance while he strives to fill up the treasury, a reproduction of the broken cistern of the Danaides.
Mr. Speaker, it was in 1918 that I first came into this House; everything was new to me then. At that time I listened to rather inflamed speeches-we were so to speak on IJtie top of a volcano-hovrever I believe the intentions of my hon. friend's have changed for the better; they have realized I believe, that to promote peace and harmony in this country they should make their appeal to the spirit of good-will, to the spirit of tolerance. The war which was ranging then has come to an end. The post-war problems, however, did not dampen the enthusiasm of the association I alluded to a moment ago; here amongst my papers I discovered a gigantic advertisement that the Manufacturers' Association had published in the Montreal newspaper La Presse on the 17th of March, 1919. In this advertisement the Manufacturers' Association asks: Where are you going to get the revenue? Where are you going to find the $400,000,000 you need? In the pockets of the people of course, by burdening them with further taxes. I do not think -the hon. Minister of Finance found his inspiration in this advertisement of last year; however, the same spirit is predominant in the Cabinet, the same spirit which was evident some years ago and is still evident to-day.
Not content with publishing advertisements broadcast in the newspapers this association appealed to manufacturers to enroll in its membership and showed them the advantages of such action. Fortunately the manufacturers of Berthier county recognize the merits of a free trade policy and I take pleasure in reading to the House the answer sent by one of our Berthier manufacturers to Mr. Howard Smith, chairman of the Canadian Manufacturers' Association :
Berthiep.vii.le, P.Q., April 22nd, 1919. Mr. Howard Smith,
Pres. Canadian Mfg. Assn.,
Montreal, Que.
Dear Sir:-
Referring to your communication regarding a petition to the Government at Ottawa to maintain the present high tariff on raw or finished products now manufactured in Canada, would say that our experience is that we would much prefer a reduction in tariff on our lines.

In fact, if you will remove the tariff on our raw material we are certain we would be in a position to compete with the United States very favorably and if the United States would remove their tariff on our finished product, we could and would go into the United States market to a very great advantage, since we would have lt>0 million more people to sell to.
We are therefore very much in favor of lower tariff on all of our lines finished or for the raw material at least.
In fact I am quite sure you are of my opinion in case we can so exchange with the United States.
Very truly yours,
(Signed) George A. Savoy,
Managing Director.
(Translation.) Mr. Speaker, everybody is not in favtiur of a high tariff; I believe the great majority of our people desire a revision downwards. Since, as the statistics quoted by the hon. member for Fort William show, the middle classes comprise the major portion of our population, I feel sure that an increase in import duties will bear most heavily on this class of the community. I am almost through, Mr. Speaker. Let me say that I highly appreciate the nice regard shown us by our friends on the Government side in the course of the last, and of the present, session. I am happy to see that the sentiment which sprang up during the war is fast disappearing. I used to wonder if the members from the province of Quebec, who speak the French tongue, who represent the pioneers of this country, those ancestors of ours, who at one time preserved Canada to the British flag, I used to wonder, I say, whether those citizens had the same rights as are granted to other citizens. I believe that the effervescence stirred up by the war has subsided; I believe that all men of good-will are going to work for the cause of union and forbearance and that the energy of each and every one of our citizens will be pledged to the common task of leading our beloved Canada to the promised land of her glorious future.


Mr. S. E. ELKIN (St. John City and counties of St. John and Albert):: Mr. Speaker, in opening my remarks this evening I desire in the first place to congratulate the Minister of Finance on the very able way in which he presented his Budget Speech yesterday. I think he is to be highly commended for the frankness with which he placed the country's present position, and particularly the financial situation, before the people. The people for some time have been waiting to know just what the conditions were following this terrible period of five years through which we have just passed. Naturally, with such
large expenditures as the Government had to face during those years, it was to be expected that it would take some time to balance the accounts. I am sure that the situation, now that we know the truth, was not so serious as many of us had expected it would be. I think also that the country is to be congratulated on having a Minister of Finance with courage and boldness enough to bring into effect such a Budget as was introduced yesterday. It must have taken considerable courage to go from the beaten track of years into practically a new sphere of taxation, but the minister and his colleagues were convinced, no doubt, that the time had come when the people of Canada should bear the burden imposed by the war and that we should no longer borrow money for the immense revenue we have to raise. In this connection the minister, I think, has brought down a Budget which in every way will make for economy and production. Those who have studied the situation of this country during the last year have realized that if Canada is to take her place in the export markets of the world, if our people are to be prosperous, if posterity is not to be burdened with an enormous debt for years and years to come, then those of us who are directing or helping to direct the policy of the country should immediately get down to business as other countries are doing. Apropos of this, I may quote a little sketch I read the other day:
In popular parlance the " come-back " of John Bull & Sons proved something; of a boomerang. It was as if John Bull was saying to the world, with the man who was called upon to deny his published obituary notice, "the report is grossly exaggerated."
American manufacturers have quickly realized that an insistance upon discounting our dollar to the limit was in truth the very killing of the goose that laid the golden egg. That is why many of them accepted Canadian funds, banking their balances within the Dominion until the situation clears.
I am sure that when our financial friends in the United States have had time to digest the Budget Speech of the Minister of Finance they will realize that so far as gold reserves and general trade are concerned, with the courage of the people of Canada there will be no need further to discount the Canadian dollar.
I am glad to hear the Minister of Finance say that if it is possible the business profits tax will be taken off next year. At the present time that tax seems to be about the only thing in the system of taxation that is vexatious to the people. It cannot

the mowers, rakes, tedders, stackers, and wienehes, come from Peoria, 111.; the portable elevators and washing machines come from Pontiac, 111.; the wagons, from Nashua, Ind.	>


John Flaws Reid: May I ask the
hon. member a question?


Stanley Edward Elkin: Certainly.


John Flaws Reid: Does he know
why the implements sold by the Canadian Grain Growers' Association come from the United States? I don't suppose the hon. member is aware, so I will tell him.


Georges Henri Boivin: Order. I
must remind the hon. member that what he proposes to do would not be submitting a question.


Stanley Edward Elkin: REDUCTIONS IN THE CANADIAN CUSTOMS TARIFF SINCE THE YEAR 1911-Con. Since Underwood Tariff became effective 1913 no reductions U.S. tariff dues.
Tariff Item.	Old General Tariff.	New General Tariff.118a	Squid, per pound	1 cent. 25 p.c. 25 p.c.	Free. Free. Free.180a	188a	Decalcomania paper not printed when imported by manufacturers oi decalcomania transfers to be used in their own factories in the	War tax	209b	Nicotine sulphate	Free. 7} p.c.264	Peppermint oil	20 p.c.	War tax	264	Essential oils	10 p.c.	7} p.c. 7} p.c. Free.War tax	278a	Peanut oil for manufacturing soap or for canning fish; soya bean oil for manufacturing soap	War tax excepting peanut oil for canning fish	290	Cement, Portland. Per 100 lbs	8 cents. 15 p.c.327a	Silvered lenses for automobile lamps	35 p.c.	War tax	353a	Aluminum leaf or foil	271 n o	Free.War tax	375b	Ferromanganese and spiegeleisen containing more than fifteen per cent manganese. Per ton	$2.50	Free.War tax	441	Typecasting and typesetting machines and parts thereof, adapted for use in printing offices	20 p.c. 17} p.c. 20 p.c. 20 p.c. 20 p.c. 20 p.o. 20 p.c. 25 p.c. 17} p.c. to 35 p.c. From 5 p.c. to 30 p.c. or $2.00 per ton.	Free. 12| p.c. 15 p.c.445	Mowing machines, harvesters, self binding or without binders, binding attachments, reapers and complete parts thereof not including shafting or malleable iron castings; also finished parts for repairs	446	Cultivators, harrows, horse-rakes, seed drills, manure spreaders and weeders and complete parts thereof	446a	Traction ditching machines, not being ploughs, adapted for tile drainage on farms, valued at retail at not more than three thousand dollars each and complete parts thereof	446b	Ploughs and complete parts thereof	15 p.c. 15 p.c. 15 p.c. 20 p.c.446c	Windmills and complete parts thereof	447 448	Portable engines with boilers in combination, horse powers and traction engines for farm purposes; windstackers and threshing machine separators, including baggers, weighers and self feeders therefor and complete parts	
Hayloaders, potato diggers, fodder or feed cutters, grain crushers, fanning mills, hay tedders, farm road or field rollers, post hole	466a	Glassware and other scientific apparatus for laboratory work in public hospitals also apparatus for sterilizing purposes, not including washing or laundry machines, all articles in this item when imported in good faith for the use and by order of any public hospital	478a	Iron or steel bands, strips or sheets, number fourteen gauge or thinner, coated polished or not, and rolled iron or steel sections, not being ordinary square, flat or round bars, when imported by manufacturers of saddlery hardware and hames for use exlcusive-ly in the manufacture of such articles in their own factories	
War tax	Free.533a	Garnetted wool waste in the white when imported by manufacturers of woollen goods	Free. 20 p.c. Free.591	Farm vragons and complete parts thereof	25 p.c. 17} p.c.	664a	Nitrate compounds not elsewhere specified for use in the manufacture of explosives	War tax	671a	Metal tips, studs and eyes adapted for the manufacture of corset clasps and corset wires	35 p.c. v	Free.War tax	689a	Miners' rescue appliances, designed for emergency use in mines, where artificial breathing is necessary in the presence of poisonous gases, and automatic resuscitation apparatus for artificial breathing, to aid in the saving of human life	17? p.c. to 35 p.c.	Free.


REDUCTIONS IN THE CANADIAN CUSTOMS TARIFF SINCE THE YEAR 1911
[Stage Direction]
Con. Since Underwood Tariff became effective 1913 no reductions U.S. tariff dues.
Tariff Item.	Old General Tariff.	New General Tariff.G92a	Articles presented from abroad in recognition of the saving of human	From 17| p.c.	Free.705a	Machines, vehicles and various implements for agricultural purposes moved by mechanical power, if actually owned abroad by the settler for at least six months before his removal to Canada	to 25 p.c. From 20 p.c.	Free.Traction engines $1,400 and less; and traction parts thereof for farm	to 35 p.c. 20 p.c.	Free.445a	Malleable iron castings when imported by manufacturers for use exclusively in their own factories in the manufacture of mowing machines, harvesters, binding attachments and reapers	27* p.c.	17* p.c.
Is Canada to be the only free trade country with free trade a misnomer as it is at the present time? Free trade, as we understand it to-day, or as it might be possible under our Farmer and Liberal friends, would be a one-sided trade.
In view of the demands which western farmers are making that our Government make an immediate and substantial allround reduction in the customs tariff, it is only proper that we should consider what our Allies are doing!
The importation of manufactured goods into Great Britain is subject to restrictions which constitute very high protection.
France is not lowering her tariff; on the contrary she is shutting out the goods of other countries by a system of import licenses.
Italy, like Great Britain and France, is restricting imports.
The Premier of South Africa has announced that the tariff of that country, heretofore designed for revenue only, will be increased to protect home industries.
Nothing has been heard to warrant the belief that any lowering of the tariff is even under consideration by Australia, New Zealand, Newfoundland, Japan, Brazil or Portugal.
In the United States the Republican party has now a majority in both the Senate and Congress and it has always supported a high tariff. The National Industrial Conference Board of the United States reported -"That a more highly protective tariff will be advocated .... is practically certain," and twenty-six Bills now before Congress increasing the tariff.
The farmer, or one-sided trader might well be challenged to point to a single country in the world to-day which is proposing to lower its tariff at this critical time. And why is this? Because the above-mentioned

countries are determined to reconstruct their industries on a peace basis, to manufacture for themselves what they need, and to provide employment for their soldiers and war workers.
Is Canada to be the only country in the world to throw down its safeguards? Is she going to ignore the great lesson taught by the war, that a nation must maintain within its own boundaries all the elements of self-protection and self-support? Are we to build a nation within the Empire-a Canadian nation, not a dependent; a nation self-sustaining in days of need as well as plenty. Our policy with our immense natural resources and people of initiative should be national, not class.
Referring for a moment to the latest Budget brought in by the Finance Minister of Australia, the new tariff, it is said for the first time follows the Canadian precedent in having three distinct schedules of duties -British Preferential, Intermediate and General Tariff columns. The British Preferential rates came immediately into operation in so far as goods and products manufactured in the United Kingdom are concerned.
The Finance Minister of Australia states:
While it is admitted that no Parliament can bind the succeeding Parliament to any prospective customs duties, yet the new principle of a ''deferred scale of duties" to become operative at fixed dates (mainly on January 1, 1921, and the same date in 1922) has been introduced into the Tariff Bill. The deferred duty proposals comprise twenty-two items, and their incidence bears chiefly upon iron and steel products, vessels trading in Australian waters, and certain lines of fuse and explosives. The minister explained that the deferred duty principle was to give definite encouragement to investors to establish industries within Australia, and quoted instances of the probable establishment of industrial plants when sufficient protection was to some extent assured.

I might point out a few features as to the Australian tariff. Pig iron'was free until the new tariff came in; to-day the general tariff is forty shillings per ton. Pipes cast and wrought per ton, forty-eight shillings before this tariff came down; the Finance Minister of Australia has raised the duty to eighty shillings. Rails and other items in that category which were thirty-five shillings per ton have been raised to seventy-five shillings, eighty-five shillings and ninety-five shillings. And so on throughout this whole tariff. The Australian Government,-and a more or less Labour Government at that,-have at last realized that if Australia is to be a big industrial country these new industries must be protected, and they have gone at it in a wholesale way. Further than that, the value for duty is to be taken as the fair market value of the goods in the principal markets of the country whence the same were exported in the usual and ordinary commercial acceptation of the term and free on board at the port of export in such country, with a further addition of ten per cent on such market value.
Dealing with free trade as it concerns our transportation problem, transportation was a large issue in the Reciprocity campaign of 1911. It is a bigger issue to-day, because since then Canada has begun the operation of the Canadian National railways, a great transcontinental system. She has already spent hundreds of millions upon these enterprises, and may have to spend many millions more. Her only chance to prevent that investment becoming a dead loss is to keep a steady flow of traffic moving from east to west, and from west to east. If ever it becomes diverted to a north and south direction, her transportation plant might as well be scrapped.
Under reciprocity or free trade that is what would inevitably happen. In fact western farmers are quite frank in the expression of their desire to market their grain in Minneapolis and Chicago, and to buy their requirements in manufactured goods from the Middle and Western States. Their wdiole effort at present is to encourage the buying of United States goods in preference to Canadian. Inferentially, therefore, their whole effort is to make it difficult or impossible to operate our transcontinental railways at a profit. These railways were built with the money of the people of Canada, in order that there might be opened up for settlement a territory whose population are now enjoying marked prosperity. Without the railways there would have been
no West. Without the taxes cheerfully paid year after year by Canadians in the East there would have been no railways. Is the partnership arrangement, that has proven so mutually profitable, now to be terminated simply because of the unwillingness of the West to pay its share of the operating expenses? And must the whole investment be wiped out in consequence?
It is essential that Canadian credit should be maintained at the high standard at which it now is. It may be necessary at some day in the future for public works or for other capital	account	to	borrow money.
When Canada goes to her banker, fortunately the Canadian people at the present time, and asks for a loan they will want to know two things: First, what is she going to do with the money she is asking for, and second, what sources of income has she that will justify the belief that she will be able to repay? Canada can hardly borrow money when she has to admit that she is going to give it away, or is going to use it in meeting interest charges on what she already owes. Her chances of success would be better if she could show that she was going to employ it in useful public works, but even then she would have to be in a position to prove that her revenue would be equal to the task of carrying all existing obligations, plus interest and sinking fund on the new loan she was trying to>
negotiate. Faced with the direct question "What is your estimated revenue for the-year ending March, 1921, or 1922, and from what sources?" how would she answer were she at this juncture to enact any measure of free trade? She could show that under her present tariff, with the addition of the special war tariff and taxes, after meeting all claims for drawbacks, she was able to meet all her obligations for the year. But what guarantee would there be that she could do as well under free trade? At the very time when she absolutely must maintain her credit, is she deliberately to invite refusal, if need be, by adopting fiscal changes that will make it impossible foT her to give any satisfactory assurances as to what her revenues will amount to? If she cannot borrow money for public works, and if, in consequence, there ensues a long period of widespread unemployment, what is the effect going to be on Victory Bonds? With business depressed and people out of work, the bonds will undoubtedly come onto the market in large volume, and that in turn will depreciate their value. Is Canada to be a party to an arrangement that will
[Stage Direction]
double-cross her own people who have come so nobly to her assistance in financing the war? I think sometimes governments find it a difficult lesson to learn that future governmental revenues are based entirely on the present development of the nation's resources, and development can only be attained through the attraction of capital into enterprise by the inducement of satisfactory and reasonable returns on the capital invested.
I think it would be advisable for the Minister of Finance, if he can see his w.ay clear, to impose a more moderate rate of income tax next year. It seems to me that the difficulty of collecting the small tax hardly makes it worth while, and the other tax is so heavy as to be almost exorbitant, and at times defeats its purpose.
I am sorry it has been necessary for me to take up so much time this evening, but I felt that, not having declared myself before, I should take a stand before this Parliament and before the country and my constituents. It seems to me that this is a time when all members of Parliament must shoulder the responsibility which rests upon them. After all the country looks to some extent to its law-makers sitting in this House to lead the way. We have a long journey before us in Canada, but it is a journey on which we can see our way. We have great resources. We have a courageous people. We are not so old but that the courage and the faith of our forefathers still remain in us. We are not so old but that we can remember many of the large developments that have taken place in this country. We have before us always the record of the past five years. Surely in Canada we have nothing to be ashamed of. We can look forward with a great deal of confidence to the mastering of the problems that face us financially, and in nation-building; and I do hope that this debate will be characterized by its high national tone.
After all, there is nothing so important at the present time in this country as that Canada shall stand higher than she has ever stood before. There is no real difference between the two sides of this House. The difference is purely imaginery, because while we have one side talking protection, the other side is talking partial free trade but means protection. This is a time in our history for us to forget to a large extent our party differences. The Government have many problems to face, and it behooves all of us who are in the fortunate position to represent constituencies in this

Parliament at this critical time to maintain the general interest, not the interest of a
class.
Mr. J. F. JOHNSTON:: I understood the hon. gentleman to say that the farmers of Western Canada wish to market their wheat at Minneapolis and also to purchase their machinery there. If I heard him correctly, he is absolutely wrong in his statement.


Georges Henri Boivin: Hon. members should not abuse the privilege which they have of asking a question by rising presumably for that purpose and taking advantage of the opportunity to interject a statement or expression of opinion. By a strict interpretation of the rules of debate these hon. members should be considered as having exhausted their right to speak.
Mr. D'ANJOU (Translation): Mr. Speaker, in addressing the House this evening I have no intention of setting forth a definition of protection or free trade. I merely wish to say that I, personally, am in favour of whatever tariff changes may benefit the country and that I .abide by the resolution passed at the great Liberal convention of August, 1919. Therefore, since the amendment of the hon. member for Shelburne and Queen's (Mr. Fielding) contains a miniature likeness of that resolution I shall take pleasure in voting for the amendment. The hoin. member from St. John, N.B. stated, amongst other things, that once upon a time he had been a free trader; he forgot to mention, however, that at one time he had been a Liberal also and that while he had altered his mind he had changed parties too, which explains how our former free trader has become converted to the doctrine of protection. A goodly portion of his speech was devoted to attacks against the farming community. Like many another horn, member on the Government side the hon. gentleman from St. John, N.B. seems to fear the farmers' movement; no doubt he despairs of ever being re-elected to a seat in this House, a lot which will assuredly befall the great majority otf the hon. gentlemen on your right, Mr. Speaker.
I myself am not a farmer; I have no brief for the farmers; the important Farmer party in this House is well able to- take care of its own interests. However, as the representative of a riding which is distinctly agricultural in character, I deem it my duty to challenge the statements of any hon. member who starts, hammer .and tongs, after the farmers of this country.
"The hon. gentleman from St. John, N.B. said that the farmers paid no taxes on their

profits, that their profits were exempt. The hon. member, no doubt, is interested in a few mighty corporations and he is not very keen on sharing his profits with the Government. Of course he is perfectly willing to share all honour with the Government, but he would rather keep his profits to himself. He resembles all those profiteers who, during the war, amassed fortunes with the help of this Government. During the war while our people were bowed down in pain and suffering, while so many Of our boys were shedding their blood on the battlefields of old Europe, these gentlemen -we have several of them in this House- at the head of powerful corporations were taking in millions; at that time, I repeat, blood was flowing in torrents on the fields of Flanders and other battle grounds. So it seems to me the hon. member for St. John, N.B., has no right to complain of the farmers.
During the present session it has been insinuated that the farmers were the worst of war profiteers, that the war had enriched them tremendously. Like every other mere mortal the farmer has suffered from the rise in the cost of commodities; he has had to pay more for labour and for agricultural machinery; consequently he is entitled to dispose of his wares at a little higher price. It was brought out in a recent debate, particularly by my hon. friend, the member for L'Islet (Mr. Fafard) that profiteering is not to be found .amongst the farmers, but amongst the middlemen; it is the middleman who goes from farm to farm buying up all the produce at ridiculously low prices and later sells this same produce in the public markets at a fabulous figure. As the hon. member for l'lslet explained, potatoes bought last fall for between 90 cents and $1.10 a bag were later sold at $5 and $6 a bag. Did that money go into the farmer's pocket? No, it went into the pockets of the middlemen who hoarded this produce in cold storage plants; the middlemen that this Government wants to shield-there you have your profiteers. They are the men who deserve the Government's wrath; not only should they he thrown into prison, they should be hanged. That is the treatment meted out to profiteers in certain countries of Europe.
According to the statement of the Minister of Finance himself the country is confronted with .a pyramid of debt. The people of Canada will be astounded to hear this statement from the lips of the minister. However, there is nothing surprising about
it after all the guilty extravagance indulged in by this Government during the last five years. Truly the hon. Minister of the Interior (Mr. Meighen) must feel satisfied; at last his dream has come true; the country is bankrupt; we are down to our last farthing.
On March 31st, 1920, our national debt was $3,014,483,774.12. I repeat, there is no room here for surprise. For my part, during the last and preceding sessions I stated that, although not absolutely opposed to our participation in the war, I decidedly was opposed to this .country taking an unreasonable and irrational part in the hostilities; that is my position still. We see to-day the result of this irrational participation in the war. Whatever may be said, this war was not fought for the defence of civilization and liberty; even now that the League of Nations has become a reality, we can very weill see that the last war, like most others, was .fought for commercial supremacy and world domination.
The hon. member for Fort William (Mr. Manion) declared that the paternal Government of which he is such an ardent supporter had .striven with every means at its disposal to promote agriculture in this country; indeed, he said, the Estimates for the present year give $5,000,000 to agriculture-however the Estimates include $12,000,000 for military purposes. Apparently the member .for Fort William is satisfied with this vote of $12,000,000 for military purposes since he finds $5,000,000 sufficient for agriculture. Well, I vrouild like to see those $12,000,000 added to the $5,000,000 already voted; thus agriculture would have $17,000,000 and the army nothing. The war we have just been through cost us enough in blood and treasure. While the war was perhaps not fought .for the defence of freedom and civilization it was fought for the destruction of Prussian militarism, and I maintain that when, at the cost of untold sacrifices we have succeeded in crushing militarism in Germany, is no time to introduce militarism into this country. I do not know what opinions the hon. member for Fort William may hold. I say that instead of voting $12,000,000 for military purposes the Government should have given the money to agriculture, should have used it, as I have often asked, for the establishment of new experimental farms, for schools of agriculture and not for military schools, for an army of tillers of the soil and not for an army of soldiers. I have not changed my attitude and even if some

hon. member on the Government side should accuse me of disloyalty I would not care one whit; I have the courage of my convictions and no one will deter me from taking my stand openly.
When I asked the hon. minister for an experimental farm in Eimouski county he told me that he could not grant my request because the Government lacked the necessary funds. Under cover of the policy of economy the Government is doing things which are neithei to the advantage o.f the country nor in the country's interests. Among other things I was promised nearly $30,000 foT the completion of the port at Eimouski. This undertaking was in the interest not only of Eimouski county alone, hut of a very important district of the province of Quebec; it would have been equally advantageous to the neighbouring county represented by my hen. friend from Ma-tane (Mr. Pelletier). Well, on the plea of economy, I was refused $16,800, and now the Government is going to spend $12,000 -000, perhaps $20,000,000, to establish military encampments all through the country. I do not countenance this policy; I am in favour of economy, but economy well understood. I have said before in the course of the present session and I repeat here to-day, that the 'Government can never [DOT]spend too much money for the promotion of agriculture; since agriculture is the principal industry Of this country and will help us, more than any other thing, to overcome the difficulties which beset our country to-day.
The spirit of unrest is stalking through this country, unrest caused in great part by the high cost of living; still the Budget reveals no attempt on the part of the Government to (bring relief to the people.
If I am in favour of the amendment presented by the hon. member for Shelburne and Queen's, it is because I am convinced that the adoption of this amendment and the carrying out of the policy therein enunciated would bring about an improvement in (the present situation and the lowering of the cost of living.
Over production is certainly one of the best ways of doing this, for with us as in many other countries, consumption has increased enormously and production has decreased. There should at least be equilibrium between the two, and in order to bring that about, production and over-production should he encouraged by all possible means. You hear much said in blame of the farmers, hut during the war we were

very well pleased to see them bend all their energies towards intensified production, so as to feed not only the Canadian soldier at the front but our people at home. The most rational and most efficient way of encouraging agriculture and over-production is to put the farmer in the way of obtaining more cheaply farming implements among other things, by removing the customs duty from them, and also, as asked for in the amendments, from certain necessaries of life.
But the present Government are not in power for the benefit of the agricultural class any more than of other classes in the country save one. The present -Government are in power for their own advantage and that of their supporters. This -Government have the support of the profiteers, of those who were enriched by the war, of the namby-pamby young fellows who paraded the streets of Ottawa, Montreal and elsewhere during the war on a $10, $12 or $15 a d-ay pay, while the workmen's sons were having their 'backs broken in the trenches of Flanders.
I would like to say a word as to the railway policy. Like all the hon. members who sit on this side of the -House, I have always been, -and am still, opposed to the operating of the railways Iby the Government, and the events have proved that we were right. Before the Government -came to the conclusion of finally adopting this policy, we had the examples of England and the United States, which in trying to apply this policy had met -with monumental failure. Consequently, when the hon. Minister of Eailways (Mr. Eeid) came to tell this House that, after a period of nine months, his administration of the Government railways showed a deficit of $45,000,000, the hon. members on this side of the House were not surprised. For my part, I still hold that such a policy is not calculated to benefit the country, but rather to benefit certain railway magnates, close friends of the Government, and who share their advantages, perhaps, with certain members * of this House who advocated this policy and supported it in Parliament.
I do not intend to occupy much of the time of the House. I would like though to say a few words as to the general course followed by the Government. There is no doubt hut that we are governed somewhat according to the Bussian or Prussian system. Autocracy reigns supreme in this country, and as was so truly observed by the hon. leader of the Opposition in the"

magnificent speech which he delivered the other evening, we have coine to the point of using secret diplomacy. Such is the new ill-use of power which this Government has added to their guilt. They decided, without consulting Parliament, that is, without consulting the Canadian people through their representatives, to send an emissary to Washington; and when everything was done, they came and said to Parliament, "Without your authorization, without consulting you as representatives of the people, we have decided this, and to-day, whether you are willing or not, the thing is done, and has to be abided by." A fine way forsooth of governing a democratic country; a fine way of respecting the rights of the people! I for one have already [DOT] had occasion to protest against such ill-use of power on the part of the Government. I find the Canadian nation a long-suffering people. It seems to me that had such abuse of power taken place in some other country, its government would long have ceased to exist. The Canadian people are good, they are patient, tout their hour shall come before long, and whatever toe the government then sitting on your right, Mr. Speaker, toe they a Liberal, Government- as I am convinced they will be-or be they a Farmers' Government, they will toe a vast improvement upon what we have to-day.
We already knew that the Government was no longer trusted by the people, tout we bad further evidence of the fact the other evening when the vote was taken upon the motion of the hon. member .for Shelburne and Queen's protesting against the appointment of a Canadian representative at Washington.
Then how could this Government have the confidence of the people, seeing the .iniquitous way in which they won the election and the fraudulent methods they used to get into power? No wonder that, from the start, the people had no confidence in them and the Government did not act. in .guch a way as to win their confidence. (There remains only one thing for them to do, i.e., to pack up their trunks and to appear before the electorate. The people are anxious to look upon the congenial faces of these hon. gentlemen opposite when they seek re-election; anxious to stare at. these renegades who sit at your right, Mr. Speaker, and who betrayed them. I am sure 'that the answer of the people will be a condemnation of this Government who usurped the executive power and who committed all the abuses of which an autio-.cratic Government might be guilty. It does
pot matter what Government will be formed a,t that time: either a good Liberal administration having at- its head the eminent and able leader of the Liberal Opposition or a Government composed of our friends the Farmers who have a very distinguished leader in the person of the ex-,Minister of Agriculture (iMr. Crerar). What we, of the Opposition want is that the Government come and ask the people for a new ,mandate. We are sure that the verdict .will be one of reprobation and condemna-,tion, because the people who were deceived .and shocked in their most intimate feelings, want to take their revenge and the ^revenge will be unsparing. I am sure, .there might not remain ten of the present tmembers sitting now at your right, Mr. Speaker. The people will elect representatives not like some hon. members of the present parliament who owe their election to the extorting of soldier votes, but who shall have been chosen freely and sincerely through a better franchise Act than that which the Government wishes to impose upon the House now. I am positive that the people will grant their confidence to hon. members of this side of the House, Mr. Speaker, for they have always worked' hard in the interest of the country and this-they will continue to do until the Government decide to appeal to the people.
On motion of Mr. F. R. Lalor (Haldi-mand) the debate was adjourned.
On, motion of lit, Hon. 'Mr. Doherty the House adjourned at lil p,m.
Thursday, May 20, 1920.